Traders waited throughout the week before making significant additions in anticipation of the weekend. The slight volatility introduced by the release of US macroeconomic data did not lead to a fundamental change in trajectory.
Why is the cryptocurrency market currently down?
Aaron Arnold, a cryptocurrency researcher, and YouTuber stated that the recent employment market data, which was released three days ago, was the catalyst for the drop. According to the report’s findings, the unemployment rate fell to 3.4% from an earlier estimate of 3.6%. That is the lowest unemployment rate since May of 1969. The proportion of those actively looking for work increased to 62.4%.
Following a lackluster start to the earnings season, it appears that traders will wait until Federal Reserve Chairman Jerome Powell’s speech on Tuesday afternoon before making any significant market adjustments.
If signs of a decline emerge, the $21,000-$20,000 range could serve as a retest target for Bitcoin. Many bets are riding on the results of the January Consumer Price Index (CPI) statistics, which are expected to be released on February 14th.
If it demonstrates that inflation is falling faster than expected or even reversing that downward trend, the information will benefit the US dollar while taking some wind out of the rise in risk assets like cryptocurrencies.
Following a 13% drop from the middle of 2022, when it was hovering at twenty-year highs, the US Dollar Index (DXY) is now stabilizing.
According to Aaron Arnold, the cryptocurrency market cannot formally enter a bull cycle as long as interest rates remain at record highs. At the time of writing, Bitcoin is precisely $22,766, and Ether is exactly $1,620.