Bitcoin Falls as U.S. Jobless Claims Signal Labor Market Rebound

Bitcoin has fallen below the psychological $68,000 level following the release of the U.S. initial weekly jobless claims. The macro data came in below expectations, signaling that the labor market is indeed rebounding, which makes a case for the Fed to hold rates steady at the March FOMC meeting.

Bitcoin Drops Below $68,000 Following Weekly Claims Release

Bitcoin has dropped below $68,000 from an intraday high of $68,800, down on the day. The leading crypto is currently trading at around $67,800 following the release of the U.S. initial weekly jobless claims.

Department of Labor data shows that the weekly claims for the week ending February 21 were 212,000, below expectations of 215,000. The previous week’s figure was revised downwards from 208,000 to 206,000.

This marks a negative for Bitcoin and the broader crypto market, as it signals that the labor market is rebounding, which could further delay more rate cuts as the Fed focuses on rising inflation. The Fed made three cuts last year to address weakness in the labor market.

As CoinGape reported, Fed Governor Chris Waller had also stated that his support for a March rate cut will depend on the February jobs report. He indicated that he will support holding rates steady if the February data mirrors the January data, as nonfarm payrolls rose way above expectations last month.

The Fed is likely to hold rates steady at the March FOMC meeting, as Fed officials such as Fed Presidents Lorie Logan and Beth Hammack have signaled that rising inflation is more of a concern at the moment, with the labor market stabilizing. CME FedWatch data shows that there is currently a 98% chance that the Fed will hold rates steady and only a 2% chance that they lower rates by 25 basis points (bps).

PPI Inflation Drops Tomorrow

The January PPI inflation report drops tomorrow, which could also impact the Bitcoin price and broader crypto market. Market participants will look to this macro data for further guidance on the current state of inflation, especially following last week’s hot PCE inflation data.

The PCE came in at 2.9% year-over-year (YOY), higher than expectations of 2.8%. Meanwhile, the core PCE came in at 3.0%, above expectations of 2.9%. This suggests that inflation may be rising as some Fed officials fear. Interestingly, the FOMC minutes showed that several participants may support a hike if inflation remains elevated.

Amid these developments, it is worth noting that Bitcoin saw a relief rally yesterday, rising to as high as $70,000. This came as uncertainty around the Trump tariffs cooled, with the U.S. stating that it does not plan to impose new tariffs on China following the Supreme Court’s ruling.