Robust job data spurs market downturn

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Market update

Markets are navigating heightened volatility, driven by a mix of economic data and shifting policy expectations that are adding to investor uncertainty.

The recent downturn is linked to the release of unexpectedly robust job opening data in the United States. This development led to a market pullback, as traders anticipated that the US Federal Reserve might maintain elevated interest rates for an extended period. The decline triggered substantial long liquidations, totalling US$622 million, including a significant single order on ETHUSDT valued at US$17.74 million.

The market was already uneasy following comments from Federal Reserve Chair Jerome Powell, which suggested a firm stance on monetary policy and tempered hopes for additional rate cuts, fuelling further volatility. Despite a sharp sell-off, investor sentiment remains optimistic. The total cryptocurrency sector experienced a 6.87% decline, shedding US$241 billion in just 24 hours, with the market capitalisation falling to US$3.28 trillion.

Donald Trump’s upcoming inauguration on January 20, 2025, is expected to sustain market volatility as investors anticipate policy shifts. With a pro-crypto majority in Congress and key appointments like Scott Bessent as Treasury Secretary and Elon Musk as an advisor, the administration signals a significant pivot towards cryptocurrency. Initiatives like the Crypto Council and Bitcoin Act of 2024 aim to integrate digital assets into economic policy.

Key economic events will also shape market sentiment. The FOMC minutes on January 9, Non-Farm Payrolls data on January 10, and the CPI release on January 15 are expected to influence expectations for monetary policy and inflation. These developments, coupled with a pro-crypto legislative agenda, are set to drive significant market activity, positioning digital assets at the forefront of economic innovation and investor focus.

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