Non-farm employment index shakes up the cryptocurrency market: February volatility analyzed with the latest data

The cryptocurrency market is closely linked to global macroeconomic trends. In particular, the Non-Farm Payrolls (NFP) index, which indicates the health of the US labor market, is a key indicator that determines the Federal Reserve’s interest rate cut path and directly impacts Bitcoin and the broader crypto ecosystem. Let’s take a look at the complex signals currently facing the market.

Non-Farm Payrolls that Drive Market Sentiment

In recent weeks, the crypto market has shown high interest in labor market indicators. Ahead of the Non-Farm Payrolls release, market participants are adjusting their positions amid economic uncertainty. Lin Tran, Chief Market Analyst at XS.com, pointed out, “Poor employment data than expected suggests a sharp slowdown in the US economy, which could heighten expectations for more aggressive monetary easing.”

An interesting point is that weak employment statistics can paradoxically be positive for risk assets. If Non-Farm Payrolls fall below expectations, the Fed may consider additional rate cuts due to concerns about economic slowdown. Currently, Bitcoin is trading around $78,020, and Ethereum remains at about $2,350.

The Current Reality of the Cryptocurrency Market

Since last weekend, the market has continued a consistent bearish trend. The total crypto market cap has stabilized around $1.56 trillion, but the fact that 75 of the top 100 coins are trading below major moving averages reflects widespread weakness.

Institutional investor sentiment is influencing market psychology. There has been a net outflow of $357 million from spot Bitcoin ETFs, the highest since mid-November. Meanwhile, Ethereum spot ETFs recorded an outflow of $224.8 million.

The slowdown in stablecoin growth suggests a decrease in new capital inflows into the crypto market. Matrixport analyzed, “Despite the slowdown in growth rate, the absolute size remains significant, indicating that the liquidity environment in the crypto market is less optimistic than expected.”

Technical Signals and Chart Analysis

From a technical perspective, Bitcoin has lost support of its short-term upward trendline. A retest near the recent low of around $76,780 on the daily chart is considered a plausible scenario. The 1-day implied volatility index for Bitcoin from Volmex is moving within the 40-60% annualized range, indicating that the market is not yet expecting sharp volatility.

Bitcoin dominance has slightly increased to 59.25%, reflecting risk-averse sentiment in the market. Hash rate remains at 1,047 EH/s, maintaining network health.

Macroeconomic Background: Movements of the Dollar and Gold

The movements in the global financial markets are also worth noting. The US 10-year Treasury yield is at 4.18%, remaining relatively resilient despite the Fed’s inclination to cut rates. The US Dollar Index (DXY) has fallen 0.12% to 98.19.

Interestingly, the Chinese yuan has reached 7.0417 per dollar, its highest in nearly two months. The yuan’s strength is likely to lead to a weakening of the dollar index, which could provide upward momentum for risk assets like Bitcoin. Gold futures declined 0.66% to $4,306.80.

Weakness in Cryptocurrency-Related Stocks and Institutional Movements

Crypto listed companies have been major victims of the market weakness. Coinbase (COIN) fell 6.37%, Galaxy Digital (GLXY) dropped 8.26%, and CleanSpark (CLSK) declined 15.07%. Mining-related stocks also declined across the board, reflecting a deterioration in industry sentiment.

However, positive signals are also emerging. ARK Invest made crypto-related stock purchases totaling about $59 million. This includes $16.3 million in Coinbase (COIN), $10.8 million in Circle (CRCL), and $17 million in Galaxy (GLXY). These can be interpreted as long-term institutional buy signals.

Upcoming Major Events and Token Ecosystem

The crypto ecosystem event calendar is also changing. Arbitrum (ARB) is set to release about 1.9% of its circulating supply, worth approximately $19.88 million, currently trading at around $0.14. Dash (DASH) has been listed on Binance Turkey, and Magma Finance (MAGMA) has been newly listed on several exchanges.

The vote for the appointment of the ecosystem growth lead at Moons DAO is underway, and Aerodrome hosted an X Space session with Nasdaq Global Capital’s head. These developments suggest ongoing institutionalization and regulatory-friendly evolution of the crypto industry.

Market Outlook and the Importance of Non-Farm Payrolls

The current market situation is highly sensitive to macroeconomic indicators. The Non-Farm Payrolls release is expected to serve as a catalyst that will determine the short-term direction of the crypto market beyond mere economic data. Weak employment figures could lead to expectations of monetary easing, positively impacting risk assets, but concerns over economic slowdown and risk aversion could increase short-term volatility.

How Bitcoin maintains its psychological support level of $78,000 and how technical resistance levels will function are key points to watch in the future. At this moment, investors should be prepared for volatility around the Non-Farm Payrolls release and monitor institutional positioning changes from a long-term perspective.