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Bitcoin stays within narrow limits below $70,000 in anticipation of Wednesday’s U.S. employment figures.
Two officials from the Trump administration indicated that markets should prepare for January employment data that may be below expectations.
Bitcoin in narrow range ahead of employment figures (TyliJura/Pixabay)
Key points:
- Bitcoin and the broader cryptocurrency market experienced a downturn around the opening of the U.S. stock market, but quickly rebounded, with BTC rising back above $69,000.
- Experts note that bitcoin’s recent decline, the most significant since the 2024 halving, occurred amid low spot trading volumes, indicating that retail investors have largely stepped back while leveraged derivatives influence price fluctuations.
- The U.S. employment data for January, a closely monitored report, is set to be released on Wednesday, with two Trump administration officials indicating that the figures may be less robust than anticipated.
In line with the recent trend, cryptocurrency markets fell sharply when U.S. stocks began trading on Tuesday, but most of those losses were quickly recovered.
During mid-morning trading, bitcoin was priced at $69,200, showing a slight decline from the previous day. Ether lagged behind, decreasing by 1.8%, with similar drops noted in XRP and Solana .
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Despite bitcoin’s current decline being the most pronounced since the 2024 halving, trading volume remained low during this period, indicating that retail investors have not aggressively sold their holdings, as noted by Kaiko.
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The “market [is now] nearing critical technical support levels that will decide whether the four-year cycle framework stays intact,” wrote Kaiko research analyst Laurens Fraussen in a report on Tuesday.
Trading firm Wintermute anticipates that bitcoin will continue to fluctuate within the current range as it is still in the price discovery phase.
According to the firm, recent bitcoin price movements have been largely influenced by leveraged derivatives rather than spot demand, with light spot trading volumes making prices more susceptible to crowded positions. Wintermute highlighted last Friday’s rebound as a short squeeze in perpetual futures and noted that the resurgence of volatility took investors by surprise after a period of relative calm.
Upcoming January jobs report
The government’s January Nonfarm Payrolls Report, initially scheduled for release last Friday, is now set to be published on Wednesday morning due to the recent brief federal shutdown.
Economists predict an addition of 70,000 jobs, an increase from 50,000 in December. The unemployment rate is anticipated to hold steady at 4.4%.
However, White House trade counselor Peter Navarro stated in a Fox interview on Tuesday that expectations should be significantly adjusted downward. His remarks followed those of White House economic adviser Kevin Hassett, who urged markets not to react excessively to potentially weak jobs data.
These comments seem to have been acknowledged by the bond market, where the yield on the 10-year Treasury has decreased by 5 basis points to 4.14%. Generally, lower interest rates and a more accommodating Federal Reserve monetary policy are viewed as favorable for assets like bitcoin, yet this cycle has shown a different outcome, with bitcoin experiencing declines even as the Fed has lowered rates by 75 basis points in recent months.
