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Join WhatsApp channelOn February 2, the worldwide cryptocurrency market cap surged past the significant $1.6 trillion threshold, following the release of the latest non-farm payroll data which raised questions about the accuracy of recent remarks made by Jerome Powell, the Chair of the U.S. Federal Reserve.
The employment statistics from the newly published non-farm payroll report hint at a potential upward momentum in cryptocurrency values, suggesting that investors might be gearing up for favorable market movements.
Powell’s remarks led to a dramatic $90 billion downturn in crypto values
Just a day earlier, on February 1, the global cryptocurrency market cap experienced a downturn, approaching the $1.5 trillion mark. This decline occurred shortly after Powell’s controversial declarations hinting at delaying interest rate cuts beyond the expected March 2024 timeline.
“Considering today’s meeting, my view is that it’s unlikely the committee will have enough confidence by our March meeting to designate it as the moment for action. However, future developments could alter this outlook,” stated Jerome Powell, Chair of the U.S. Federal Reserve.
These comments were made in the aftermath of a Federal Open Market Committee (FOMC) meeting on January 31, leading to a broad retreat across various risk assets, including equities and cryptocurrencies. Within two days post-Powell’s statement, Bitcoin and Ethereum saw a 5% drop in their values, while the total crypto market saw a 4.3% fall, erasing over $90 billion from January 30 to February 2, as shown in the provided graphs.
Despite the market downturn, on-chain indicators reveal that Ethereum investors increased their bullish bets, undeterred by the market’s negative trend. Moreover, the latest non-farm payroll report published on February 2 could pave the way for a bullish resurgence in the near future.
Non-Farm Payrolls Report Exceeds Market Predictions Significantly
The U.S. Bureau of Labor Statistics released the newest non-farm payrolls report on February 2, revealing that U.S. businesses added 353,000 jobs in January 2024, a figure 92.8% higher than what market analysts had anticipated based on consensus data from TradingEconomics, which forecasted a 180,000 job increase. This marked a fourth consecutive month-over-month growth since October 2023, with a notable jump of 20,000 jobs.
Impact of U.S. Non-Farm Payrolls Report on the Crypto Market
Savvy investors may view this unexpectedly strong jobs report as a sign of potential bullish momentum for risk assets like stocks and cryptocurrencies. A rising job count often indicates an economy running hot, which could lead the Federal Reserve to consider rate cuts to cool down the market.
This puts into question Powell’s recent suggestion of delaying rate cuts past the March 2024 timeline widely anticipated by the market.
Consequently, the January 2024 U.S. non-farm payrolls report boosts investor expectations for forthcoming rate cuts, potentially igniting increased bullish activity in the cryptocurrency markets shortly. As of February 2, the global cryptocurrency market cap has climbed to $1.6 trillion, with a daily increase of $3.6 billion. Since the report’s publication, Bitcoin’s price has rebounded to above $43,000, and Ethereum has also recovered to the $2,300 level.
This restrained yet positive market reaction could lay the groundwork for a more optimistic market outlook in the forthcoming period.
