Earlier today, the US Bureau of Labor Statistics unveiled the employment data for January 2025. Following the report, Bitcoin (BTC) experienced a temporary surge, hitting the $100,000 mark, but subsequently slumped back to $98,000.
The fluctuation in Bitcoin’s value was in response to the lower-than-anticipated job growth in the US. The report showed that only 143,000 jobs were added in January, a figure that fell short of the projected 170,000. This was a considerable drop compared to December 2024, which saw a job increase of 256,000.
Despite this brief spike to $100,110, Bitcoin couldn’t sustain the rally and quickly slid back to $97,957. The accompanying chart depicts this swift rise and fall in BTC price.
Further to the disappointing job growth, the unemployment rate dipped from 4.1% to 4%, indicating a robust US labor market in spite of high interest rates through most of 2024.
Following this, the CME FedWatch Tool now predicts only an 8.5% chance of the US Federal Reserve (Fed) trimming interest rates at its meeting on March 19. This possibility had previously stood at 15% prior to the employment report.
A reduced chance of rate cuts implies that interest rates may stay high for a more extended period. This could potentially dampen the optimism of Bitcoin investors hoping for multiple reductions in 2025, which could have stimulated the market and favored risk-on assets like BTC.
It’s crucial to note that from September to December 2024, the Fed had cut interest rates by a total of 100 basis points. However, given the continued strength of the labor market and low unemployment, the Fed might adopt a wait-and-see approach, awaiting potential economic red flags before implementing further cuts.
Global capital markets commentator, The Kobeissi Letter, pointed out that the current US unemployment rate is the lowest since May 2024, adding that the “Fed pause is here to stay.”
Despite numerous macroeconomic hurdles, Bitcoin has been trading within a tight range of $92,000 to $106,000, exhibiting impressive resilience. For instance, BTC remained unaffected by the stock market downturn triggered by the launch of China’s AI-powered language model, DeepSeek, and renewed trade tensions between the US and China.
Nevertheless, concerns about the recent decline in Bitcoin network activity remain, leading some analysts to question if BTC is currently overvalued. As of press time, BTC is trading at $98,015, marking a slight 1% increase over the past 24 hours.
