In anticipation of the weekend, traders held off on making any significant decisions during the week. The small volatility brought on by the release of U.S. macroeconomic data did not result in a change in the general trend in the cryptocurrency market.
However, over the weekend, various cryptocurrencies including Bitcoin (BTC) and Ether (ETH) have seen their prices fall down massively. Additionally, Bitcoin has also lost its hold on the $23K mark. Meanwhile, Ethereum is also merely holding onto the $1,600 market.
Why Is the Cryptocurrency Market Down Today?
Aaron Arnold, one of the most prominent crypto researchers and YouTubers has mentioned that the current employment market data issued just three days ago was the sole reason for the crypto market crash. As per the report findings, the unemployment rate has dropped to 3.4% from the earlier estimate of 3.6%. That said, this is the lowest unemployment rate since May 1969. The number of active job hunters has increased to 62.4%.
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Following a dull beginning to the earning season, it seems that investors will wait till the Federal Reserve Chairman Jerome Powell’s speech. The speech is scheduled to take place on Tuesday afternoon. Following this, there might be significant changes in the cryptocurrency market.
The $21,000-$20,000 region could be used as a retest target for Bitcoin if indications of a declining start to show. The Consumer Price Index (CPI) statistics for January, which will be made public on February 14th, will have a significant impact.
The data may be favourable for the U.S. dollar and lessen the momentum behind the rise in risk assets like cryptocurrencies if it reveals that inflation is declining less rapidly than anticipated or possibly reversing that downward trend.
The U.S. Dollar Index (DXY) is currently in the process of stabilizing after a 13% drop from mid-2022 when it was circling at twenty-year highs.
According to Aaron Arnold, as long as interest rates are at all-time highs, the cryptocurrency market cannot formally enter a bull cycle. At the time of publication, the value of Bitcoin is $22,766, while that of Ether is $1,620.
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