How do non-farm payroll data influence cryptocurrency assets through Federal Reserve policies?

Bitcoin is essentially a high-risk, zero-yield alternative asset, with its price movements highly dependent on the global liquidity environment. The Federal Reserve's monetary policy is a key driver of global liquidity conditions, and non-farm payroll data is one of the core indicators used by the Fed to formulate policy. Its transmission logic is very clear.

1. Surprising non-farm payrolls directly reverse Fed rate cut expectations

The core goal of the Federal Reserve's monetary policy is full employment + price stability. When the labor market is strong and the economy is resilient, the Fed has no motivation to cut interest rates and may even delay easing measures.
Before the data release, the market widely bet that the probability of a rate cut in June exceeded 65%, believing that the U.S. economy was gradually slowing, inflation was continuing to decline, and the Fed might start a rate-cut cycle. After the 178k non-farm payrolls figure was announced, CME FedWatch Tool showed the probability of a rate cut in June plummeted to 2%. The market completely revised its easing expectations, re-pricing a policy path of "maintaining higher rates for longer." The April FOMC meeting is now highly likely to keep rates unchanged, significantly delaying the rate cut cycle.
For Bitcoin, a high-interest-rate environment means higher yields on risk-free assets like U.S. Treasuries and cash dollars. Funds will flow out of risk assets such as cryptocurrencies and growth stocks into risk-free assets, directly draining liquidity from the crypto market, which naturally puts downward pressure on prices.

2. The dollar and U.S. Treasury yields rise together, suppressing dollar-denominated assets

Bitcoin is priced in USD, and the strength of the dollar index directly affects its valuation. Strong non-farm payroll data boosts dollar confidence, attracting global capital back to the U.S., leading to a stronger dollar index. Assets priced in USD, such as Bitcoin and gold, are passively devalued accordingly.

Meanwhile, the 10-year U.S. Treasury yield is regarded as the global asset pricing anchor. Rising yields mean a significant increase in opportunity costs for capital. Bitcoin itself does not generate interest, so in the context of rising Treasury yields, its attractiveness diminishes sharply. Institutional funds reduce crypto holdings and increase U.S. Treasury positions, further intensifying Bitcoin's selling pressure.

3. Leverage liquidations amplify market volatility

Previously, Bitcoin hovered above $70k for several days, accumulating a large number of high-leverage long positions. Investors generally held expectations of Fed rate cuts, with bullish sentiment prevailing.
However, the unexpectedly negative non-farm payroll data became the last straw for longs, triggering a wave of forced liquidations of long positions in the short term. This "longs killing longs" cascade led to rapid price declines, breaking key support levels.

Current core characteristics of the crypto market: macro-driven, short-term pressure
Looking at the current market, the crypto scene after the non-farm payroll data shows clear macro dominance. Short-term trends are completely detached from on-chain data, halving narratives, and other internal factors, focusing instead on Fed policy expectations. There are three main features:

First, short-term market movements are dominated by Fed expectations, with technical analysis temporarily invalidated.
Previously, Bitcoin oscillated around $70k with strong technical support. But after the non-farm payroll data, support levels were quickly broken. Market attention shifted away from on-chain holdings and fund flows to macro indicators like the dollar index, U.S. Treasury yields, and rate cut probabilities. These macro data points have become the sole short-term market indicators.

Second, institutional funds are temporarily fleeing to safety, but long-term allocation logic remains unchanged.
After the data release, U.S. spot Bitcoin ETF saw a single-day net outflow of over $180 million, marking the largest outflow in nearly three weeks, indicating increased short-term risk aversion among institutions. However, in the long run, with Bitcoin halving approaching and deflationary supply expectations clear, global institutional demand for crypto assets remains. This outflow is a short-term rebalancing, not a long-term exit.

Third, market sentiment shifts rapidly, with panic and caution coexisting.
Post-data, crypto market fear and greed indices quickly dropped from greed into neutral or fear zones. Investors reduce leverage and trim positions, becoming more cautious. Short-term trading activity declines, and the market enters a consolidation phase, awaiting the next key macro data to guide direction.

Future trend outlook: short-term consolidation, long-term fundamentals unchanged

Considering the impact of non-farm payroll data, Fed policy direction, and the crypto market cycle, the following outlook is made for Bitcoin and crypto assets:

1. Short-term (1-2 weeks): Range-bound between $66k and $70k, difficult to break key support
In the near term, the negative impact of the non-farm payroll data will persist. Fed rate cut expectations will cool down, and the dollar and Treasury yields will stay high. Bitcoin will likely struggle to quickly regain above $70k, mostly oscillating within $66,000–$70k.
$66,000 is the recent low and a dense trading zone, providing strong support. Absent major negative surprises, breaking below this level is unlikely. Conversely, $70,000 will serve as a strong resistance, with rebounds likely to face rejection. Investors should control positions carefully, avoiding reckless buying or chasing highs.

2. Medium-term (1-3 months): Watch inflation data and await policy signals
After the non-farm payrolls, focus shifts to the March CPI inflation data scheduled for April 10, which will be another key basis for Fed policy decisions.
If inflation continues to decline, even with strong employment, the Fed may signal a dovish stance, and rate cut expectations could slightly rebound. Bitcoin could then resume a sideways upward trend.
If inflation rebounds along with strong employment, the Fed will likely maintain high rates, and crypto markets will remain under pressure, prolonging consolidation.

3. Long-term (over 6 months): Halving + institutional demand support
In the long run, the recent drop triggered by non-farm payrolls is just short-term volatility and will not change the core logic of the crypto market.
On one hand, Bitcoin halving is approaching, and historical data shows that supply-side deflation around halving often drives bull markets.
On the other hand, global crypto regulation is accelerating, U.S. spot ETF inflows continue, and institutional demand is steadily rising. Long-term, Bitcoin still has upward potential.