Recently, I’ve been thinking about an interesting question—on the release day of U.S. non-farm employment data, why does the crypto market move with such intense volatility?

Many people think that NFP reports only affect the forex market and stocks, but that’s not the case. I’ve noticed that whenever employment data comes out, Bitcoin and Ethereum both show a clear, coordinated reaction. Right now, BTC is above $78k and ETH is above $2.3k, but the price swings before and after the NFP release are often quite surprising.

The core logic is this: strong employment data boosts the U.S. dollar index, leading investors to choose the U.S. dollar as a safe-haven asset—at which point cryptocurrencies get sold off. Conversely, if employment data is weak and the dollar weakens, investors looking for alternative assets flow into digital currencies. In simple terms, non-farm employment data affects the strength of the dollar, and the strength of the dollar directly determines the direction of the crypto market.

I’ve seen plenty of examples. After a strong employment report in September 2023, the dollar strengthened quickly, and Bitcoin fell by 5% within 24 hours. Then in March 2024, when employment data unexpectedly declined, the dollar dropped accordingly, and Bitcoin instead rose by 7%. This correlation is now hard to deny.

For traders, the implications of how non-farm employment data affects the market are very practical. Day traders should prepare before the report is released, monitor the difference between market forecasts and prior data, and set stop-loss orders. After the report comes out, react quickly and track real-time prices using technical analysis. Long-term investors, on the other hand, need to view things from the perspective of macro liquidity, because digital markets are especially sensitive to changes in global capital flows.

To be honest, as the crypto market becomes increasingly tied to traditional financial markets, traders who ignore these economic data are likely to end up at a disadvantage. Understanding how non-farm employment data influences the market has become a required course for forming a trading strategy. Every first Friday of the month, be sure to pay extra attention—because that NFP report might be what determines your trading opportunities for the month.