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crypto.news 2025-01-31 06:31:56

Bitcoin’s next big move hinges on the U.S. labor market data, says analyst

Bitcoin is moving with macro conditions. If U.S. labor data signals weakness, the Fed may step in—potentially pushing Bitcoin higher. Bitcoin’s ( BTC ) next move could hinge on upcoming U.S. labor market data, as macro conditions continue to shape liquidity and risk sentiment. Quantitative analyst Benjamin Cowen suggests the unemployment rate will be a key factor, predicting that if it stays within the 4.1%-4.2% range, Bitcoin could follow last year’s path and rally into February and March. However, a rate that is too high or too low could create uncertainty, affecting bond yields, Federal Reserve policy expectations, and ultimately, Bitcoin’s price action. I think decision time for #BTC will be next week, following the release of the labor market data. If the unemployment rate is 4.1% or 4.2%, then there is a higher probability IMO that #BTC will follow blueprint from last year and go higher in Feb/Mar. If the unemployment rate… pic.twitter.com/eu2ixFHj7d — Benjamin Cowen (@intocryptoverse) January 31, 2025 The latest labor market report, released on Jan. 10, showed the U.S. unemployment rate dipped slightly to 4.1% in December from 4.2% in November. Job growth significantly outpaced expectations, with 256,000 jobs added compared to the forecasted 153,000. A strong labor market typically reduces the urgency for the Fed’s rate cuts, which can weigh on Bitcoin, as higher rates tighten financial conditions. You might also like: ‘Rich Dad’ author Kiyosaki predicts Bitcoin will challenge US dollar dominance Recent jobless claims add to the evolving picture. Initial unemployment claims for the week ending Jan. 25 dropped to 207,000, below the projected 220,000. While layoffs remain historically low, hiring has slowed, signaling that the labor market might be cooling. If next week’s report confirms this trend, it could raise expectations for monetary easing—typically favorable for risk assets like Bitcoin. Amid this, the Fed, following a total of 100 basis points in rate cuts since September, acknowledged that inflation remains somewhat elevated but opted to keep its benchmark interest rate at 4.25%-4.50% during its Jan. 29 policy meeting. Political pressure has also entered the picture, with former President Donald Trump criticizing the Fed for not acting more aggressively. Trump has pushed for policies promoting domestic energy expansion and deregulation, while blaming high inflation on what he calls the central bank’s misplaced focus on social and environmental issues. You might also like: Day after Trump calls DeepSeek as positive, US officials u-turn and classify it as IP theft Meanwhile, Treasury yields have declined , with the 10-year yield slipping to 4.526% and the 2-year yield to 4.213%, following weaker-than-expected Q4 GDP growth of 2.3%—below the 2.5% forecast. Lower yields generally benefit Bitcoin by easing financial conditions and reducing competition from traditional assets. However, a stronger-than-expected jobs report could push yields higher, strengthening the dollar and making risk assets less attractive. Bitcoin, trading at $104,000 as of this writing, sits at a critical juncture. If the labor market remains stable but shows signs of cooling, it could provide the ideal backdrop for a rally, mirroring last year’s trend. However, a sharp deviation in either direction could introduce volatility. You might also like: Bitcoin didn’t save Tesla — It just delayed the bigger problem

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