Something quite interesting has been happening in the US labor market lately. The announcement of layoffs, or what we often call layoffs, means job cuts announced by companies, and in January, this data surged dramatically—up 205% to over 108,000 cases. This is the highest level since January 2009, when Lehman Brothers collapsed. So if layoffs mean planned job terminations, what we're seeing now is a pretty serious early warning signal about the state of the labor market.

Most of the reductions come from the technology sector, with Amazon leading, while UPS also announced tens of thousands of layoffs. Year-over-year, the number increased by 118%, indicating a sharp cooling in the first year of Trump returning to the presidency. It’s important to note that layoff data can serve as an early indicator compared to the official payroll reports from the Labor Department, which still show a strong labor market.

Other private data also show the same signals. Truflation, which measures real-time inflation based on blockchain data, shows a sharp decline below 1%, far different from the official CPI, which remains above the Fed’s 2% target. The combination of these two indicators—rising layoffs and falling inflation—creates pressure on the Federal Reserve to start cutting interest rates.

For Bitcoin bulls, this is good news. If the Fed indeed moves aggressively to cut rates, risk assets like Bitcoin could gain support. BTC is currently trading around $73.91K, still far from its all-time high of $126.08K. Analysts’ projections vary widely—JPMorgan expects the Fed to hold rates through 2026 and then raise them in 2027, while some other banks see at least two 25 basis point rate cuts this year. There are also economists who believe Kevin Warsh, Trump’s preferred candidate for Fed chair, will cut rates by up to 100 basis points before the midterm elections.

What’s interesting is that when layoffs become more relevant, it means the labor market is experiencing serious stress, and that usually triggers central banks to take action. So for now, the seemingly poor surface data could actually be a bullish signal for the crypto market. The situation remains fluid and uncertain, but this momentum is worth watching for portfolio allocation to risk assets.