Bitcoin and cryptocurrencies fall, pending the US jobs report

The cryptocurrency market falls once again. Bitcoin (BTC) has dropped more than 1.5% in the last 24 hours and is below $23,500 after reaching over $24,000 previously. For its part, Ethereum (ETH) also falls, by 1.8%, and tries to maintain the $1,600 level.

The 'cryptos' falls contrast with the optimism shown after the last rate decision of the Federal Reserve (Fed) and the message of its chairman, Jerome Powell, who acknowledged that "for the first time" we could begin to talk about a disinflationary process. However, many experts warned that this move does not mean a pivot, as Powell reiterated that they do not contemplate lowering interest rates this year, and that the divergence between market belief and the Fed's stance continues to widen.

In any case, whether this scenario occurs or not, the fact is that the market was considerably encouraged before remembering that today, on Friday, the always important U.S. employment data is released. According to the private consulting firm ADP, hiring in January (106,000) fell well below expectations and the December data, fueling fears that the nonfarm payrolls data will be worse than expected and alter the Fed's roadmap.

"The data is expected to be anywhere between the 150K to 200K mark. But we think the most important number is 150K, with anything lower than 150K potentially throwing the Fed out of balance. What we mean by that is if the number comes out below the 150K reading, market players are likely to become extremely sensitive," explained Naeem Aslam, chief market analyst at AvaTrade.

According to the expert, the market fears that there are signs that the U.S. economy is heading towards a recession, "as job numbers have lost their charm and unemployment has started to tick higher." "At the same time, traders will also feel some relief that the lower jobs number is less likely to push the Fed to keep the hawkish monetary policy onboard. So a lower reading than the forecast, which is an ocean apart from the forecast, will be highly tricky," he added.

"On the flip side, if the number comes near the expectations or anything which is above the expectations, traders will take that as a positive sign. However, the possibility is that they are unlikely to see that number representing the full picture as every day we hear news about job losses, and the effect will begin to trickle down in the economic number very soon. As for the Fed, the Chairman is possibly likely to feel more confident in his approach, and he may continue the process of slower interest rate hikes and prepare the economic landscape for a soft landing," he concluded.

In the rest of the market, there have been generalized falls. Ripple (XRP) drops 0.7%, while Polygon (MATIC) plunges 4% and Dogecoin (DOGE) loses 2.3%. Cardano (ADA) falls 0.4% and Solana (SOL) drops almost 3%.