Following the usual recent trend, crypto markets fell sharply when US stocks opened on Tuesday, but recovered most of those losses just as quickly.
In mid-morning trading, Bitcoin was at $69,200, down slightly from 24 hours ago. Ether underperformed, down 1.8%, with similar declines in XRP and Solana .
Although bitcoin’s current decline is the largest since the 2024 halving, trading volume remained low during the decline, suggesting that retail investors pulled back rather than rushing to sell, according to Kaiko.
The “market [is now] we are approaching critical technical support levels that will determine whether the four-year cycle framework remains intact,” Laurens Fraussen, research analyst at Kaiko, wrote in a report Tuesday.
Trading firm Wintermute expects Bitcoin to remain within the current range as it is still undergoing price discovery.
Bitcoin’s recent moves have been driven by leveraged derivatives rather than spot demand, the firm said, with light spot volumes making prices sensitive to crowded positions. Wintermute pointed to last Friday’s rebound as a short squeeze in perpetual futures and said the return of volatility had caught investors off guard after a period of complacency.
January jobs 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 predict the creation of 70,000 jobs, compared to 50,000 in December. The unemployment rate is expected to remain at 4.4%.
White House trade adviser Peter Navarro, however, said in a Fox interview on Tuesday that expectations needed to be significantly lowered. 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 noticed by the bond market, where the 10-year Treasury yield is down 5 basis points to 4.14%. Lower interest rates and looser monetary policy from the Federal Reserve are generally seen as beneficial for assets like Bitcoin, but that hasn’t been the case this cycle, with Bitcoin plunging even as the Fed cut rates by 75 basis points in recent months.
