Following the usual recent pattern, crypto markets fell sharply as US stocks opened for trading on Tuesday, but recovered most of those losses in a similarly quick fashion.
Mid morning trading, bitcoin was at $69,200, down marginally from 24 hours ago. Ether underperformed, down 1.8%, with corresponding declines in XRP and Solana .
While bitcoin’s current pullout is the most significant since the 2024 halving, trading volume remained low during the decline, suggesting retail investors pulled 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 on Tuesday.
Trading firm Wintermute expects bitcoin to remain in the current range as it is still in price discovery.
Recent bitcoin moves have been driven by leveraged derivatives rather than spot demand, the firm said, with light spot volumes leaving prices sensitive to crowded positions. Wintermute pointed to last Friday’s rally as a brief squeeze on perpetual futures and said the return of volatility surprised investors after a period of complacency.
January job reports in print
Originally scheduled for last Friday, the government’s January Nonfarm Payrolls Report will now be released Wednesday morning due to the brief federal shutdown last month.
Economist forecasts are for 70,000 jobs to have been added, up from 50,000 in December. Unemployment is expected to remain at 4.4 per cent.
However, White House trade adviser Peter Navarro said in a Fox interview on Tuesday that expectations must be revised significantly lower. His comments follow those of White House economic adviser Kevin Hassett, who advised markets not to panic over weak jobs data.
These remarks appear to have been noted by the bond market, with the 10-year Treasury yield lower by 5 basis points to 4.14%. Lower interest rates and easier monetary policy from the Federal Reserve are typically thought to be good for assets like bitcoin, but that hasn’t been the case this cycle, with bitcoin plunging even though the Fed has trimmed interest rates by 75 basis points in recent months.
