Bitcoin faces renewed macro pressure after the latest American jobs report showed a stronger labor market than expected, which pushed government bond yields up and reduced the likelihood of interest rate cuts from the Federal Reserve in the near future.
The American economy added 130,000 new jobs in January, nearly double the consensus estimates. At the same time, unemployment fell to 4.3%, indicating continued robustness in the labor market.
Although strong employment is positive for the economy in general, it simultaneously complicates the situation for risky assets like Bitcoin.
Strong job numbers delay expectations of rate cuts
The market had expected possible rate cuts in the coming months due to concerns about weaker economic growth. But a robust labor market reduces the need for monetary policy easing.
As a result, investors have adjusted their expectations for Federal Reserve policy.
The yield on U.S. 10-year government bonds jumped to 4.2%, up several basis points after the report. The two-year yield also rose, reflecting a lower probability of rapid rate cuts.
Higher interest rates tighten financial conditions. They increase borrowing costs across the economy and raise the discount rate used to value risky assets.
Why higher yields pressure Bitcoin
Bitcoin is very sensitive to liquidity conditions. When government bond yields rise, capital often shifts towards safer, interest-paying assets like government bonds.
At the same time, a stronger dollar often accompanies rising rates. A stronger dollar reduces global liquidity and makes speculative assets less attractive.
This combination creates headwinds for the crypto market.
Even though Bitcoin briefly stabilized near $70,000 earlier this week, job numbers increase the risk of new volatility. Without a clear signal that the Fed will ease monetary policy, liquidity remains strained.
"For Bitcoin, this report is a short-term headwind. Such a strong number dampens the likelihood of a rate cut in March and strengthens the Fed's decision to keep rates at 3.50%–3.75%. The cheap monetary impulse that risky assets need to start a lasting rise is pushed even further out in time. Expect the dollar to strengthen and rates to move up, which puts BTC under pressure in the short term," says David Hernandez, crypto investment specialist at 21shares to BeInCrypto.
Market structure amplifies macro stress
The recent decline showed how sensitive Bitcoin has become to macro changes. Large ETF flows, institutional hedging, and leveraged positions can amplify momentum changes as financial conditions tighten.
A stronger labor market does not necessarily mean that Bitcoin should fall. But it reduces one of the key bullish drivers: expectations of easier monetary policy.
"In the short term, Bitcoin appears defensive. The level to watch is $65,000. But if this report turns out to be temporary and not a sign that the economy is heating up again, the Fed may still cut rates later this year. When that happens, Bitcoin's limited supply will become important again. Strong numbers today may delay a rise, but do not destroy the long-term bullish scenario," says Hernandez.
The latest U.S. job report strengthens a "higher for longer" scenario for interest rates.
For Bitcoin, it is not immediately catastrophic. But it makes a sustained rise more difficult.
Unless liquidity improves or interest rates fall back, the macroeconomic backdrop is now cautious rather than supportive for the crypto market.
