US Non-farm Payrolls (NFP) is favourable information but why the big dump? 4 key points for newbies & retail investors to watch.

Many friends are confused as to why the market experienced a big dump last night despite the favourable information from the US Non-farm Payrolls (NFP). Below, we will analyze the reasons from four perspectives to help everyone better grasp the trends in the Non-farm market next time.

1. Data Interpretation: Why does "good news" turn into "bad news"
The strong US Non-farm Payrolls (NFP) data indicates that the US economy still has resilience. For the Federal Reserve, this means there is currently no urgent need to cut interest rates, and the high interest rate period may even be extended. High interest rates usually lead to a stronger dollar and rising US Treasury yields, which in turn puts pressure on risk assets such as BTC and ETH due to capital outflows. Therefore, the market interprets the "favourable information" from the data as "bearish for the crypto market."
2. Expectations and Psychology: The gap in expectations triggers a sell-off
Before the US Non-farm Payrolls (NFP) announcement on the 9th, the market generally expected weak data, which could support the Federal Reserve's interest rate cuts. However, the actual data far exceeded expectations, breaking the original projections. This "unexpected unfavorable information" triggered a rapid sell-off in the short term. At the same time, large funds also adjusted in line with the news discrepancy, amplifying market volatility.
3. Institutions and Liquidity: Capital flows shift towards low risk
After the US dollar strengthened and US Treasury yields rose, institutional funds are more inclined to flow into low-risk assets such as US Treasuries and the US dollar, leading to a reduced allocation demand for risk assets like BTC and ETH. In the short term, there may be a hedging risk through short selling. Additionally, with the relatively limited liquidity in the crypto market, even a slight increase in selling pressure could amplify the fall, potentially triggering a series of liquidations. It is recommended that medium to long-term investors exercise caution before opening positions ahead of the interest rate cut on September 18.
4. Technology and fundamentals: Resonance intensifies the fall
Before the release of the US Non-farm Payrolls (NFP), institutions attempted to push up BTC and ETH, but both failed to break through the key resistance levels (BTC 113400, ETH 4480); within half an hour after the announcement, both subsequently broke through the key support levels (BTC 112800, ETH 4450). The breach of support levels triggered a large number of stop-loss orders and leveraged liquidations, with technical and news factors resonating together, ultimately exacerbating the downward trend. #非农就业数据来袭#