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

Bitcoin is essentially a high-risk, zero-yield alternative asset, and its price movement is 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. Non-farm payrolls beat expectations, directly reversing the Fed's rate cut expectations
The core goal of the Federal Reserve's monetary policy is full employment and price stability. When the labor market is strong and the economy is resilient, the Fed has no motivation to cut 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 was expected to start a rate-cut cycle. After the 178k non-farm payroll increase 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 simultaneously, 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.
At the same time, 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. Since Bitcoin does not generate interest, its attractiveness diminishes as Treasury yields rise. Institutional funds reduce crypto holdings and increase U.S. Treasury investments, further intensifying Bitcoin's selling pressure.

3. Leverage liquidations amplify market volatility
Bitcoin previously oscillated 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 created a "longs liquidated by longs" cascade, rapidly expanding Bitcoin's decline and breaking key support levels.
Currently, the core characteristic of the crypto market is macro-driven, with short-term pressure.
Looking at the current market, after the non-farm payroll data, the crypto market shows clear macro dominance. Short-term movements are 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 trends are dominated by Fed expectations, with technical analysis temporarily invalidated.
Previously, Bitcoin oscillated around the $70k mark 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 have become the sole short-term market indicators.

Second, institutional short-term risk aversion outflows, with long-term allocation logic 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 the upcoming Bitcoin halving and clear deflationary supply expectations, 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 fear and caution coexisting.
After the data release, the crypto fear and greed index quickly dropped from greed to neutral or fear territory. Investors reduced leverage and took profits, becoming more cautious. Short-term trading activity declined, and the market entered a consolidation phase, awaiting the next key macro data to guide direction.

Future trend outlook: short-term consolidation, long-term fundamentals intact
Based on 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 at $66k-$70k, difficult to break key support
In the short term, the negative impact of the non-farm payroll data will persist. Fed rate cut expectations have cooled, and the dollar and Treasury yields remain high. Bitcoin is unlikely to quickly rebound above $70k and is expected to oscillate and consolidate between $66,000 and $70k.
$66,000 is the recent low and a dense trading zone, providing strong support. Absent major negative surprises, the probability of breaking below this level is low. Conversely, $70,000 will be a strong resistance level, and attempts to rebound there are likely to face rejection. Investors should control their positions carefully to avoid blindly bottom-fishing or chasing highs.

2. Medium-term (1-3 months): Focus on inflation data and await policy signals
After the non-farm payroll data, market focus will shift to the U.S. March CPI inflation data released on April 10, which will be another core 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 resume a sideways upward trend. If inflation rebounds along with strong employment, the Fed will likely maintain high rates, and the crypto market will remain under pressure, prolonging the consolidation phase.

3. Long-term (over 6 months): Halving + institutional allocations, market still supported
In the long run, the recent decline triggered by non-farm payroll data is a short-term fluctuation and will not change the core logic of the crypto market.
On one hand, the upcoming Bitcoin halving historically tends to lead to supply-side deflation and bullish price movements. On the other hand, the global crypto compliance process is accelerating, U.S. spot ETF continues to attract incremental funds, and institutional demand for crypto assets is steadily increasing. Long-term, Bitcoin still has upward potential.