As U.S. stock markets opened on Tuesday, cryptocurrency prices initially plunged sharply, following a familiar trend seen recently. However, these losses were swiftly recovered in a rapid rebound.
By mid-morning trading, Bitcoin (BTC) hovered around $69,200, showing only a slight decrease compared to the previous day’s value of $69,519.36. Meanwhile, Ether (ETH) lagged behind with a 1.8% drop from its $2,030.55 mark. Other tokens like XRP and Solana (SOL) also experienced similar declines; XRP was priced near $1.42 and SOL at approximately $84.59.
Despite this pullback being the largest since Bitcoin’s 2024 halving event, trading volumes remained subdued during the downturn—indicating that retail investors largely refrained from panic selling rather than rushing to exit positions according to data from Kaiko.
Laurens Fraussen of Kaiko highlighted in his Tuesday report that the market is nearing crucial technical support zones which will be pivotal in confirming whether the established four-year cycle remains valid moving forward.
The trading firm Wintermute anticipates Bitcoin will continue fluctuating within its current price range as it undergoes ongoing price discovery phases.
Wintermute noted that recent fluctuations have been primarily influenced by leveraged derivatives instead of direct spot market demand; low spot volume has made prices vulnerable to shifts caused by crowded derivative positions. The firm identified last Friday’s sharp recovery as resulting from a short squeeze on perpetual futures contracts and remarked how renewed volatility surprised many investors after an extended period of calmness.
The Upcoming January Employment Report
The government’s January Nonfarm Payrolls data release was postponed due to last month’s brief federal shutdown and is now scheduled for Wednesday morning instead of last Friday as originally planned.
Economists predict an increase of about 70,000 jobs added during January compared with December’s gain of 50,000 jobs while expecting unemployment rates to hold steady at roughly 4.4%.
However, White House trade advisor Peter Navarro suggested during an interview on Fox News Tuesday that these forecasts might need significant downward revision. His remarks came shortly after White House economic adviser Kevin Hassett urged markets not to overreact negatively if job numbers disappoint.
This cautious sentiment seems reflected in bond markets where yields on ten-year Treasury notes dropped five basis points down to 4.14%. Generally speaking, lower interest rates combined with looser Federal Reserve monetary policies tend to benefit assets such as Bitcoin—but this cycle has defied expectations since BTC has declined despite rate cuts totaling seventy-five basis points over recent months.