Following the usual recent pattern, crypto markets fell sharply when US stocks opened trading on Tuesday, but recovered most of those losses just as quickly.
In mid-morning trading, bitcoin was at $69,200, slightly down from 24 hours ago. Ether underperformed, down 1.8%, with similar declines in XRP and sunny .
While bitcoin’s current drop is the most significant since the 2024 halving, trading volume remained low throughout the decline, suggesting that retail investors took a step back rather than rushing to sell, according to Kaiko.
The “market [is now] approaching critical technical support levels that will determine whether the four-year cycle framework remains intact,” Kaiko research analyst Laurens Fraussen wrote in a report Tuesday.
Trading firm Wintermute expects bitcoin to remain in the current range as it is still in price discovery.
Bitcoin’s recent moves have been driven by leveraged derivatives rather than spot demand, the firm said, and light spot volumes make prices sensitive to crowded positions. Wintermute pointed to last Friday’s bounce as a brief squeeze in perpetual futures and said the return of volatility caught investors off guard after a period of complacency.
January employment report available
Originally scheduled for last Friday, the government’s January nonfarm payrolls report will now be released Wednesday morning due to last month’s brief federal shutdown.
Economists’ forecasts are that 70,000 jobs will have been created, compared to 50,000 in December. The unemployment rate is expected to remain at 4.4%.
However, White House trade adviser Peter Navarro said in an interview with Fox on Tuesday that expectations need to be revised significantly downward. His comments follow those of White House economic adviser Kevin Hassett, who advised markets not to panic in the face of weak jobs data.
Those comments appear to have been noted by the bond market, where the 10-year Treasury yield is lower by 5 basis points, to 4.14%. Lower interest rates and looser monetary policy from the Federal Reserve are generally assumed to be good for assets like bitcoin, but that hasn’t been the case this cycle, with bitcoin falling even as the Fed has cut rates by 75 basis points in recent months.
