Bitcoin Rebounds After January Jobs Report, but Uncertainty Lingers

After spending most of the week below $100,000, Bitcoin rebounded on Friday following mixed economic data in January

Bitcoin rebounded on Friday following mixed economic data in January, with XRP and Solana also seeing gains.

According to data from CoinDesk, XRP gained 6% in the last 24 hours, while Solana and Bitcoin both rose by 3%.

The Bureau of Labor Statistics reported that the U.S. added 143,000 jobs in January, falling short of economists’ predictions of 170,000 jobs and the 256,000 jobs added in December. The report signals a slowdown in hiring.

However, the unemployment rate dropped to 4% from 4.1%, beating expectations that it would remain steady.

The jobs report contributed to Bitcoin’s initial bump—and subsequent sell-off—as it fueled uncertainty among crypto traders about how many interest rate cuts the Federal Reserve will make this year, according to Patrick Liou, principal of institutional sales at crypto exchange Gemini.

“I think it all really leads, for today at least, to what are the cut expectations in the future,” Liou said in a recent interview.

Economic data like Friday’s jobs report can influence the crypto market because it can indicate the strength of the U.S. economy and whether the Fed will continue to make rate cuts.

Lower interest rates are good for crypto because the looser economic conditions drive investors back to risky assets like crypto.

But the conflicting data in Friday’s report didn't provide a clear path forward for the Fed, Liou said.

“The Fed is really in wait-and-see mode. And I think traders…are also really on the fence,” he said. “They aren’t sure yet because inflation has come down a little bit, but it's not a rapid descent.”

The Fed began cutting rates in September for the first time in four years after raising rates to combat inflation driven by the COVID-19 pandemic.

The rate cut triggered a wave of investors returning to crypto because of renewed interest in risky assets.

Investors are now watching for this year’s rate cuts after the Fed indicated that it would make fewer cuts in 2025 following a total of three rate cuts in 2024.

Bitcoin fell as low as $92,000 in December after the Fed announced it would slow down rate cuts.