Tonight at 8:30, the whole market held its breath waiting for the Non-Farm Payrolls. As soon as the data came out, it immediately blew upâ
In the U.S. September Non-Farm Payrolls, only 29,000 jobs were added versus expectations of 90,000. The prior figure was 162,000, and the data for July and August was also revised significantly downwardâJuly was even revised from positive growth to negative. This isnât âbelow expectationsââitâs a âcollapse.â
The moment the data was released, the market instantly changed its tone. The U.S. dollar index plunged, U.S. Treasury yields fell across the board, and Bitcoin surged aggressivelyâat one point hitting $87,000, with an intraday gain of over 3%.
Why did Bitcoin rally hard despite the Non-Farm Payrolls coming in weak?
The core is just one sentence: the worse the data, the closer the rate cuts, the looser the liquidity, and the more excited the crypto market gets.
The biggest stone that has been weighing on Bitcoin was the expectation that the Federal Reserve would keep raising interest rates. Now that employment has fallen apart, traders immediately slashed the probability of a rate hike in October from nearly 70% to just 13.8%. The market is almost certain the Fed will stop. As soon as rate-hike expectations cool off, U.S. Treasury yields move lower, the dollar weakens, and liquidity pressure easesâso money naturally rushes into risk assets. Bitcoin is the most sensitive one.
The transmission chain is very clear: Non-Farm Payrolls disappoint â rate-hike expectations fade â Treasury yields fall back â liquidity loosens â funds flood into the crypto market.
Look at the market details again: this rally directly blew up the people shorting it. Over the past hour, total liquidations across the whole network hit $122 million, with short positions accounting for as much as $119 million. The short side got carried out, and the longs are celebrating.
Of course, donât get carried away. A one-day move doesnât mean a trend reversal. After this, inflation data and Fed officialsâ remarks could stir things up again. But at least tonight, Non-Farm Payrolls will tell the market in the most straightforward way: the Fed, you canât hike anymore.
Bitcoinâs latest surge isnât really an increase in the coin itselfâitâs a rise in liquidity expectations. đ
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