US Job Data Sparks Market Optimism

Bitcoin surged past the $100,000 mark on February 7 as Wall Street reacted positively to mixed US employment data. The leading cryptocurrency defied concerns over Federal Reserve policy, capitalizing on weaker-than-expected job additions.

According to TradingView, Bitcoin spiked sharply after new employment figures revealed that the US added just 143,000 jobs in January, falling short of the projected 169,000. This unexpected slowdown in job growth fuelled optimism in risk markets, including cryptocurrencies and stocks.

BTC/USD 1-hour chart. Source: TradingView

The weaker labour market report suggested that the US economy might not be as resilient to restrictive financial policies as previously thought. However, despite market enthusiasm, the latest CME Group FedWatch Tool estimates indicated that traders are now largely ruling out the possibility of an interest rate cut at the Federal Reserve’s upcoming March meeting. The odds of a 0.25% rate cut fell from 14.5% before the jobs data release to just 8.5%.

“The unemployment rate fell to 4.0%, below expectations of 4.1%,” noted trading resource The Kobeissi Letter on X (formerly Twitter). “We now have the lowest unemployment rate since May 2024. The Fed pause is here to stay.”

Bitcoin’s Technical Breakout and Key Resistance Levels

Despite macroeconomic uncertainty, Bitcoin’s sudden rise fuelled fresh optimism among traders, with many viewing the move as a significant breakout.

Popular trader Daan Crypto Trades shared a chart on X, showing that BTC/USD had broken out from a falling wedge pattern on the hourly chart. “Higher low made, now needs to break that local high at ~$102K to leave this area behind. That’s what the bulls should try to accomplish to flip the market structure back to bullish on this timeframe,” he explained.

Fed target rate probabilities. Source: CME Group

On the four-hour chart, fellow analyst Roman echoed the sentiment, predicting further gains and a strong weekly close. “1D & 1W have completely reset to break this range and continue our uptrend to 130K,” he noted. However, he pointed out that Bitcoin still faces resistance at $108,000, which could be a decisive level for the next move.

Meanwhile, another well-known trader, Skew, argued that Bitcoin must consolidate above $100,000 on lower timeframes to sustain its bullish momentum. He identified $102,000 as a crucial threshold that bulls need to surpass to confirm a trend continuation.

“Positioning likely picks up again with trend resolution,” Skew stated, suggesting that further upside momentum could emerge if Bitcoin successfully holds key levels.

Market Outlook

Bitcoin’s rise to six figures, despite ongoing concerns over Federal Reserve policy and macroeconomic conditions, reflects renewed confidence in digital assets. However, analysts caution that sustained growth will depend on Bitcoin’s ability to overcome critical resistance levels.

With traders eyeing a potential move towards $130,000, all attention will now be on whether BTC can decisively hold above $100,000 and break through $102,000 in the coming days.

Mining Difficulty Reaches Record Highs

Bitcoin miners experienced a drop in monthly production in January as the network’s mining difficulty surged. The increased computational power required to validate transactions and mine new blocks put significant pressure on mining firms, with many seeing a downturn in output.

Leading Bitcoin miners, including Hut 8, Marathon Digital (Mara), and Bitfarms, reported a decline in production compared to December 2024. However, Riot Platforms defied the trend, recording a 2.1% increase in Bitcoin production.

Rising Network Difficulty Impacts Miners

Throughout January, Bitcoin’s network difficulty hovered around an all-time high of 110 trillion (T). This marks a 27.8% increase since the last Bitcoin halving event on April 20, 2024.

Source: Riot Platforms

Anticipating this surge in difficulty, mining companies have been upgrading their hardware and optimising operations to maintain profitability. Despite these efforts, many firms struggled to keep up with the rising computational demands.

Hut 8, for instance, mined only 65 BTC in January, marking a 27% drop from the previous month. Similarly, Marathon Digital saw a 12.5% decline, while Bitfarms recorded a 4.7% reduction in Bitcoin output.

Riot Platforms Expands Operations

In contrast to its competitors, Riot Platforms increased its Bitcoin production by commissioning a new mining facility in Texas. The company initiated a large-scale 1-gigawatt development to enhance its mining capabilities.

Jason Les, CEO of Riot Platforms, highlighted the impact of the expansion, stating:

“The Corsicana Facility reached a deployed hash rate of 15.7 EH/s towards the end of the month. We also continue to see strong results from newly deployed miners and immersion systems, reflected in the significant improvement in our operational hash rate and utilisation rates.”

 Bitfarms monthly Bitcoin production. Source: Bitfarms

Meanwhile, Hut 8 CEO Asher Genoot announced that the company is nearing completion of infrastructure upgrades that should bolster its mining capacity in the coming weeks.

Future Outlook for Bitcoin Mining

Although mining difficulty reached 110T earlier in January, it fell slightly to 108T by the month’s end, leading to an estimated hashrate of around 832 exahashes per second (EH/s).

Industry analysts predict a potential decline in Bitcoin mining hashrate due to reduced difficulty levels and fewer preorders for mining equipment. While some companies, such as Riot Platforms, continue to expand their operations, others may struggle to maintain profitability in an increasingly competitive landscape.

Bitcoin’s price has plunged by over 5% in the last 24 hours, falling below $96,000 and sparking broader declines in the cryptocurrency market. The drop follows US President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China, raising concerns about a potential trade war.

Bitcoin’s Market Decline

Bitcoin, which had remained above the $100,000 mark since mid-January, dipped as low as $91,530 on 3 February before stabilising around $95,279 at the time of writing. The sudden downturn has led to increased volatility, with analysts warning of further declines if key support levels fail.

Impact of Trump’s Tariff Announcement

Trump’s decision to impose tariffs—25% on Mexican and Canadian goods and 10% on Chinese imports—has triggered a risk-off sentiment among investors. Many have shifted towards safer assets, leading to a sell-off in Bitcoin and other major cryptocurrencies.

BTC/USD daily chart. Source: TradingView

Market analysts suggest that fears of an escalating trade war have prompted a cross-asset portfolio rebalancing, with riskier investments such as Bitcoin suffering the most. Trading firm QCP Capital noted that market participants should brace for continued volatility as negotiations between the US, Canada, and Mexico unfold.

Mass Liquidations Deepen Market Losses

The price decline has triggered a wave of liquidations in the crypto derivatives market, intensifying downward pressure.

• Approximately $465 million worth of Bitcoin leverage positions have been liquidated in the past 24 hours.
• Long positions accounted for $389 million of these liquidations, compared to just $75 million in short positions.
• The cascading liquidations have further driven Bitcoin’s price lower, mirroring a similar event on 20 December 2024, when an 11% BTC drop led to $419 million in long positions being wiped out.

With more than $2.5 billion in leveraged positions erased, some analysts have described the current sell-off as one of the largest liquidation events in recent history.

Key Support Levels to Watch

Bitcoin’s recent decline has brought it close to a critical support level at the 100-day simple moving average (SMA), currently at $93,899.

Source: The White House

• If Bitcoin manages to hold above this level, it could attempt to reclaim the 50-day SMA at $99,000.
• The Relative Strength Index (RSI) currently stands at 38, nearing oversold conditions, suggesting a possible short-term recovery.

Popular trader Daan Crypto Trades predicts that Bitcoin’s price may fluctuate within a broad range of $90,000 to $108,000 in the coming days. However, if the lower support level is breached, further losses could be expected.

While the market remains on edge, traders are closely monitoring developments in US trade policies, which could play a crucial role in Bitcoin’s next move.

Retail Investors Cash Out as Whales Hold Steady

Retail Bitcoin investors have sent a staggering 6,000 BTC to Binance this month, equating to approximately $625 million at current prices. However, while smaller investors rush to take profits, large-scale holders—commonly known as whales—are adopting a more patient approach.

According to on-chain analytics platform CryptoQuant, this divergence in behaviour highlights a familiar market trend: retail investors often sell too soon, while whales strategically time their moves to maximise gains.

Retail Activity Surges, Whales Stay Cautious

CryptoQuant’s latest data reveals that retail Bitcoin holders have significantly increased their exchange inflows in January. In contrast, whale inflows to Binance stand at just 1,000 BTC ($104 million), indicating that major holders are holding off on substantial profit-taking for now.

Worldwide Google search data for “Bitcoin.” Source: Google Trends

“We often hear about a contradiction in the behaviour of investors categorised as whales and retail,” wrote CryptoQuant contributor Darkfost in a market update. “This is exactly what is happening now when analysing data from Binance in the short term.”

This pattern suggests that retail investors fear the current bull market may be peaking, prompting them to sell. However, whales—often seen as the “smart money” in the crypto space—appear to be waiting for higher prices before offloading their holdings.

Bitcoin Price Rally Expected to Continue

Despite the recent wave of retail selling, analysts believe Bitcoin’s bull run has more ground to cover before reaching its cycle peak. Historical market trends indicate that retail investors often exit prematurely, missing out on further price gains.

CryptoCon, a well-known market analyst, has identified distinct phases of Bitcoin retail interest using Google Trends data. According to his analysis, the market has just completed “Phase 3,” which coincides with Bitcoin reaching an all-time high (ATH).

“As you might expect, interest starts to ramp up during major price rises. It seems that after enough increase, people start to get bored, and interest drops just before major highs are put in,” he explained in a post on X.

With the relative strength index (RSI) for Bitcoin search trends showing a full reset, CryptoCon predicts that the next phase—“First Cycle Top”—is about to begin. This suggests that Bitcoin’s rally is far from over and may continue to climb in the coming months.

Could Bitcoin Reach $150,000 This Cycle?

Speculation over Bitcoin’s ultimate peak in this cycle remains a topic of debate among analysts. Some forecasts suggest BTC could reach or exceed $150,000 before the bull market concludes.

Google Trends RSI data for “Bitcoin.” Source: CryptoCon/X

While retail investors are locking in profits now, historical data suggests that those who follow whale activity are more likely to benefit in the long run. With institutional interest still growing and long-term holders maintaining their positions, Bitcoin’s price trajectory could have further upside.

For now, the market remains at a crucial juncture, with whales staying patient while smaller investors rush to cash out. Whether retail traders are making the right call or exiting too soon remains to be seen—but if past cycles are any indication, Bitcoin may still have plenty of room to grow.