The recently announced US employment report created a new macro pressure on Bitcoin and general cryptocurrency markets, with employment growth well above market expectations. The report stated that the US economy created 130 thousand new jobs in January and the unemployment rate decreased to 4.3 percent. While this picture reveals the resilience of the US labor market, it has created uncertainty over the short-term outlook for risky assets such as cryptocurrencies.
Strong Employment Weakened Interest Rate Cut Expectations
With the recent growth concerns in financial markets, predictions that the Fed will cut interest rates in the near future have become stronger. However, this increase in employment weakened the need for interest rate easing. In parallel, a rapid reaction was observed in the US bond market.
Following the data, the US 10-year bond interest rate increased to 4.2, and the two-year bond interest rate continued to rise. This activity showed that the market began to view the possibility of an interest rate cut in the short term as low.
In the current structure of the US economy, the upward trend in interest rates tightens financial conditions and puts pressure on risky assets.
The Effect of Rising Bond Yields on Bitcoin
Cryptocurrency markets, especially Bitcoin, are very sensitive to changes in liquidity conditions. When bond yields increase, investors’ tendency towards higher return expectations and relatively safer assets becomes stronger. This situation may limit the interest in Bitcoin and similar digital assets.
At the same time, an appreciation in value is observed in the US dollar along with strong employment data. While a strong dollar reduces liquidity on a global scale, it also reduces the appetite for speculative assets.
“Strong data on this scale reduces the possibility of an interest rate cut in March and supports the Fed’s tendency to maintain the current interest range. In the short term, the weak liquidity environment has the potential to put pressure on Bitcoin,” it was evaluated.
Market Dynamics and Short-Term Risks in Crypto Assets
The fluctuations observed in Bitcoin in the past weeks once again revealed the impact of macroeconomic data on the crypto market. Large-scale inflows and outflows, especially from exchange-traded funds, hedging moves by institutional investors and high leverage positions caused rapid changes.
It stands out that strong labor market data does not mean a sudden decline in Bitcoin price, but one of the most important catalysts for the market’s bullish expectation, namely the hope of looser monetary policy, has been put in the background for now.
“Bitcoin is expected to remain in a defensive position in the short term. While the $65,000 level is kept in the foreground, the possibility of a Fed interest rate cut within the year may still be on the table if the strong data is temporary. Upside movements may remain limited for now; however, long-term expectations do not seem to be broken,” it was highlighted.
Cautious Viewing in Macro View
The latest US employment report has strengthened expectations that the Fed may keep interest rates higher for longer. This situation limits the upward movement of Bitcoin and crypto markets at the current stage.
It is stated that unless there is an improvement in liquidity conditions or a decline in bond interest rates, the markets will continue their cautious course.
