In a stunning turn of events, the price of Bitcoin catapulted above the psychologically significant $100,000 level on Friday morning following the release of a critical U.S. jobs report that came in weaker than anticipated. The unexpected slowdown in the labor market ignited a fierce rally in the world’s largest cryptocurrency, as investors speculated that the Federal Reserve may pump the brakes on its aggressive interest rate hike campaign.
Nonfarm Payrolls Miss the Mark
According to data from the Bureau of Labor Statistics, the U.S. economy added a mere 143,000 jobs in January, falling considerably short of the 170,000 forecast by economists. This marked a sharp deceleration from the 256,000 jobs created in December, suggesting that the Fed’s monetary tightening efforts may finally be taking their toll on the labor market.
Unemployment Rate Dips, Wages Rise
Despite the disappointing headline number, the report did contain some bright spots. The unemployment rate dipped to 4.0% from 4.1% in December, defying expectations for it to hold steady. Moreover, average hourly earnings jumped 0.5% month-over-month, trouncing the 0.3% estimate and indicating that wage pressures remain robust.
Bitcoin Price Erupts Higher
The mixed jobs report sent shockwaves through financial markets, with risk assets like Bitcoin immediately surging higher. The largest crypto by market cap blasted above the closely-watched $100,000 level for the first time since early February, notching a swift 5% gain within minutes of the data release. The explosive move higher snapped a three-day losing streak for BTC and reignited bullish sentiment among crypto traders.
Fed Rate Hike Odds Slashed
In the wake of the softer-than-expected jobs print, investors drastically scaled back their expectations for further Fed tightening. According to the CME FedWatch Tool, the implied probability of a 25 basis point rate hike at the March FOMC meeting plummeted to just 8% from 15% prior to the report. The diminished odds of additional rate increases fueled risk appetite and boosted demand for high-beta assets like Bitcoin.
“Relatively high wage inflation and a low unemployment rate mean that the Federal Reserve isn’t likely to cut rates anytime soon, but markets already know that. As long as equity markets remain broadly stable, Bitcoin could make news highs later this quarter.”
– Zach Pandl, Grayscale’s Head of Research
Technical Outlook Brightens
From a technical perspective, Bitcoin’s emphatic rally above the key $100,000 hurdle is a decidedly bullish development. The breakout marks a clear victory for bulls and opens the door to a potential retest of BTC’s all-time high near $135,000 in the coming weeks. However, the largest crypto must first clear some intermediate resistance levels around $105,000 and $110,000 to keep the momentum going.
Altcoins Join the Party
Bitcoin was not the only cryptocurrency to benefit from the risk-on mood following the U.S. jobs data. Ethereum, the second-largest crypto, surged 3% to reclaim the $2,600 level, while other major altcoins like Binance Coin (BNB), Cardano (ADA), and Solana (SOL) notched gains between 2-4%. The broad-based rally in the crypto market lifted the total capitalization of all digital assets back above $2.5 trillion.
Final Thoughts
The U.S. jobs report for January delivered a dovish surprise that lit a fire under Bitcoin and the broader crypto market. The slower pace of job creation and reduced odds of further Fed rate hikes sparked a powerful risk-on rally, propelling BTC decisively above the pivotal $100,000 level. While it remains to be seen if this will mark the start of a new bull market for Bitcoin, the technical picture has undoubtedly improved and opened the door to further upside in the near term. As always, crypto investors should keep a close eye on incoming economic data and central bank developments to gauge the sustainability of the current rally.
The mixed jobs report sent shockwaves through financial markets, with risk assets like Bitcoin immediately surging higher. The largest crypto by market cap blasted above the closely-watched $100,000 level for the first time since early February, notching a swift 5% gain within minutes of the data release. The explosive move higher snapped a three-day losing streak for BTC and reignited bullish sentiment among crypto traders.
Fed Rate Hike Odds Slashed
In the wake of the softer-than-expected jobs print, investors drastically scaled back their expectations for further Fed tightening. According to the CME FedWatch Tool, the implied probability of a 25 basis point rate hike at the March FOMC meeting plummeted to just 8% from 15% prior to the report. The diminished odds of additional rate increases fueled risk appetite and boosted demand for high-beta assets like Bitcoin.
“Relatively high wage inflation and a low unemployment rate mean that the Federal Reserve isn’t likely to cut rates anytime soon, but markets already know that. As long as equity markets remain broadly stable, Bitcoin could make news highs later this quarter.”
– Zach Pandl, Grayscale’s Head of Research
Technical Outlook Brightens
From a technical perspective, Bitcoin’s emphatic rally above the key $100,000 hurdle is a decidedly bullish development. The breakout marks a clear victory for bulls and opens the door to a potential retest of BTC’s all-time high near $135,000 in the coming weeks. However, the largest crypto must first clear some intermediate resistance levels around $105,000 and $110,000 to keep the momentum going.
Altcoins Join the Party
Bitcoin was not the only cryptocurrency to benefit from the risk-on mood following the U.S. jobs data. Ethereum, the second-largest crypto, surged 3% to reclaim the $2,600 level, while other major altcoins like Binance Coin (BNB), Cardano (ADA), and Solana (SOL) notched gains between 2-4%. The broad-based rally in the crypto market lifted the total capitalization of all digital assets back above $2.5 trillion.
Final Thoughts
The U.S. jobs report for January delivered a dovish surprise that lit a fire under Bitcoin and the broader crypto market. The slower pace of job creation and reduced odds of further Fed rate hikes sparked a powerful risk-on rally, propelling BTC decisively above the pivotal $100,000 level. While it remains to be seen if this will mark the start of a new bull market for Bitcoin, the technical picture has undoubtedly improved and opened the door to further upside in the near term. As always, crypto investors should keep a close eye on incoming economic data and central bank developments to gauge the sustainability of the current rally.
