The Fed’s Rate Cut Uncertainty Returns: January Jobs Report Surpasses Expectations, Crypto Market Sees Tug-of-War Between Bulls and Bears

Nonfarm Payroll "Surprise" Reshapes the Rate Cut Timeline

On February 11 (ET), the U.S. Bureau of Labor Statistics delivered an unexpectedly strong report: Nonfarm payrolls in January increased by 130,000, far surpassing economists’ forecasts of 55,000 and more than doubling December’s revised figure of 48,000.

At the same time, the unemployment rate fell from 4.4% to 4.3%, marking the lowest level since August 2025. These numbers paint a striking contrast—just before the release, White House National Economic Council Director Kevin Hassett had cautioned about a potential slowdown in job growth, but the 130,000 new positions clearly demonstrated a labor market far more resilient than even the most optimistic projections.

Robust nonfarm data quickly triggered a shift in rate cut expectations. According to the latest CME FedWatch data, the probability of a Fed rate cut in March plunged from 21.7% before the report to just 6.0%. The odds for an April cut also dropped from around 40% to roughly 20%. Traders have now pushed their expectations for the first rate cut from June to July, and the likelihood of three cuts this year has dropped significantly.

This marks a classic macro narrative shift: When "strong employment" meets "persistent inflation," the Fed has little reason to rush into easing.

Crypto Market’s Double Reflex: Rally, Retreat, and Rate Cut Repricing

Following the nonfarm report, the crypto market didn’t simply react with a one-way "bad news, price drop" move. Instead, it experienced a complex swing in sentiment.

Phase One (immediate reaction): Traders grew optimistic about a "soft landing" for the economy. U.S. equities and cryptocurrencies both rallied, with Bitcoin briefly breaking above the $68,000 resistance level.

Phase Two (digesting and repricing): As the market fully absorbed the implications of delayed rate cuts, risk assets came under renewed pressure. By the morning of February 12, Bitcoin had pulled back to around $67,558 on Gate and other major spot platforms, down 2.14% over 24 hours. Ethereum dropped to $1,952, a 3.19% decline.

The pricing logic here is straightforward: fading rate cut expectations = anticipated tightening of liquidity = downward valuation adjustments for rate-sensitive risk assets. Notably, the Bureau of Labor Statistics also released its annual nonfarm payroll benchmark revision through March 2025, revising the figure down by 898,000. This somewhat eased extreme market fears but did not reverse the prevailing cautious sentiment in the short term.

Latest Market Snapshot as of February 12

To help readers pinpoint the market’s current position, the following data is sourced from Gate’s real-time USD quotes as of February 12, 2026:

According to Gate’s Private Wealth Management team, current market volatility is primarily a short-term correction driven by macro expectation gaps, not a reversal of crypto’s underlying fundamentals. Bitcoin’s market dominance remains high at 58.65%, indicating capital is still gravitating toward core assets.

Consensus Amid Divergence: What Are Traders Betting On?

An interesting phenomenon has emerged: The White House continues to signal a dovish stance. After the data release, President Trump publicly stated that "the U.S. should pay the lowest interest rates in the world," and his economic advisor Hassett emphasized that "the Fed still has ample room to cut rates." This stands in stark contrast to traders, who have rapidly scaled back their rate cut expectations.

This divergence highlights a defining feature of macro trading in 2026: Markets are no longer blindly following policy guidance, but are increasingly relying on real-time data for independent pricing.

For crypto traders, this means two key takeaways:

1. Shift in Short-Term Drivers: The market’s core debate has moved from "will there be a rate cut" to "when and how many cuts." Ahead of the March FOMC meeting, any inflation data that exceeds expectations (such as the CPI report due this Friday) could trigger adjustments similar to those seen on nonfarm payroll night.
2. Structural Opportunities Emerging: As Gate’s Private Wealth Management team suggests, periods of heightened volatility are prime windows for optimizing portfolio structure. Positioning BTC and ETH as portfolio anchors (recommended allocation: 40%-50%) and leveraging Gate Earn and Staking products for yield during holding periods is a pragmatic strategy for navigating cycles.

Market Outlook: From "Rate Cut Trades" to "Data-Driven Trades"

The nonfarm report hasn’t closed the door on rate cuts, but it has certainly raised the bar. CME data now shows the market expects the first rate cut in July, with a total reduction of about 51 basis points for the year.

The key variables ahead are clear:

• February 13 CPI Report: If month-over-month inflation comes in hotter than expected, the odds of a June rate cut will shrink further.
• Implementation Pace of Trump’s Policies: Developments in tariffs, immigration, and fiscal spending bills will impact the sustainability of job growth.
• On-Chain Metrics and ETF Flows: The strength of inflows into spot Bitcoin ETFs remains a real-time indicator of institutional sentiment.

Conclusion

The February 2026 nonfarm payroll report may signal a subtle but pivotal shift in macro trading logic: from "anticipating a Fed pivot" to "accepting higher rates for longer." For the crypto market, this serves as a stress test for valuation support and a real-world check on trading tools and risk management practices.

On the Gate platform, we’re seeing smart money making deliberate choices—not panic selling, but using volatility to rebalance portfolios. As Gate Private Wealth Management emphasizes, market turbulence will eventually subside. Those who optimize their structures and hold their core positions during the shakeout are often best positioned to seize the next narrative-driven rally.