The FOMC meeting in March carries extra weight this year. After a bearish first quarter, which saw high-cap assets post their weakest quarterly returns in years, this meeting will likely set the tone for risky assets heading into the second quarter.
Recent data seemed to reinforce that meaning. According to the Bureau of Labor Statisticsthe US added 130,000 jobs in January, well above the expected 55,000, while the unemployment rate fell to 4.3% – better than forecasts of 4.4%.
In short, the labor market came out ‘stronger than expected’, reinforcing the idea that investors had priced in slower growth. Bitcoins [BTC] The post-release decline of 2.54% was further evidence of this shift in expectations.
Source: Truth Social
Surprisingly, the price revision did not stop there. The chance of a short-term interest rate cut fell sharply from 20.1% before the data was released to 6.4% at press time, underscoring how quickly sentiment adjusted to stronger economic signals.
However, the question remains: has sentiment really changed? Well, US President Donald Trump welcomed the report, saying it could reduce the country’s interest costs and support a more balanced budget outlook.
Skeptics, however, took a different position. The Kobeissi letter argued that “the Fed pause will continue,” arguing that a strong labor market reduces the urgency for rate cuts and keeps monetary policy restrictive for longer.
In short, the volatility around interest rate cut expectations continues.
On the one hand, this reinforces AMBCrypto’s view that the March FOMC carries additional weight. The bigger question for Bitcoin, however, is whether this uncertainty will weaken its ability to maintain the prevailing tight range.
Bitcoin remains vulnerable to increasing macro headwinds
Bitcoin is seeing a textbook volatility trap.
This week, BTC has fallen between $65,000 and $70,000, a range that usually reflects speculative positioning as traders bet on the next move. Particularly BTC ratio long/short became negative during the same period.
Technically, this could be a sign of busy short-term positioning. If bulls defend this range, a squeeze could push BTC toward higher resistance. That said, STHs have lost patience, with BTC still trading 30% below their cost basis.
Source: CryptoQuant
In these types of situations, maintaining support is crucial to avoid a wave of capitulation. However, key factors indicate that the road ahead will be challenging, with the volatility of rate cuts being a key bearish catalyst.
Meanwhile on the technical sidethe vulnerability remains clear. Since peaking at $97,000 in January, Bitcoin has failed to turn resistance into support twice. First around $85,000 – $90,000, then almost $75,000, putting pressure on the $65,000 bottom.
Taken together, this setup clearly reduces the incentive for STHs to hold on. Instead, with volatility still high, capitulation will become increasingly likely, increasing the likelihood of Bitcoin breaking the third floor and putting the $60,000 level at risk.
Final thoughts
- Strong jobs data in January prompted markets to revise interest rate cut expectations, increasing volatility and uncertainty for Bitcoin.
- Bitcoin remains technically vulnerable, with repeated resistance failures increasing the risk of capitulation.