Why does Bitcoin experience extreme volatility? How do the Federal Reserve's stance and employment data actually influence the market?

Question

The market has experienced a rollercoaster in the past 24 hours. To understand the driving forces behind this movement, we must start with the recently released Federal Reserve meeting minutes.

Federal Reserve Attitude Shift Triggers First Drop

The minutes of the Federal Reserve meeting released last week showed that most officials were cautious about a rate cut in December, signaling a significant reduction in market expectations for a rate cut this year to around 27%. As a result, Bitcoin responded with a decline, briefly touching around $88,000. Simultaneously, the U.S. stock market also moved downward, with investors’ risk appetite clearly weakening.

NVIDIA Earnings Turn Market Sentiment

The turning point came early this morning. NVIDIA announced earnings that exceeded expectations, strongly countering market concerns about an AI bubble. Following this, the Nasdaq futures surged nearly 2%, driving Bitcoin higher and quickly rebounding to the critical $93,000 level. This reversal demonstrated a reassessment of the outlook for Tech Stocks.

Tonight’s Employment Data Could Be the Next Catalyst

The focus now shifts to the unemployment rate and employment figures to be released by the U.S. Department of Labor. The market generally expects these data to remain flat, but it is worth noting that if economic data show slight signs of weakness, it could give the Federal Reserve further reasons to cut rates. Industry insiders speculate that if employment data appear somewhat soft, it could boost expectations for rate cuts and support risk assets.

Based on this logic, if tonight’s data shows a slight decline as expected, Bitcoin could aim for the important resistance at $95,000. Currently, BTC is at $87.81K, with a 24-hour increase of +1.06%.

Ethereum Faces a Reversal Test

Compared to Bitcoin’s rebound, Ethereum’s performance remains relatively subdued. The $2.95K level is close to the key support zone at $2,850, with a 24-hour decline of -1.91%. In the short term, this support still has capacity to hold, and a rebound could be observed, but the possibility of testing the bottom again still exists.

Key Summary

Yesterday’s sharp decline essentially reflected the impact of Federal Reserve policy uncertainty on the market, while today’s rebound was driven by improving corporate fundamentals. The future trend largely depends on whether tonight’s U.S. employment data meets expectations, which will directly influence the subsequent performance of Bitcoin and Ethereum.