U.S. employment data comes in much weaker than expected—are BTC funds starting to flow into ETH?

Question

[BlockBeats] The November US ADP employment data was a bombshell—directly decreasing by 32,000, much worse than expected. This couldn’t have come at a worse time, as the Fed is set to meet in December to decide on interest rates. Now that employment data has softened, calls for rate cuts are rising again. After the data was released, risk-off sentiment surged immediately; gold bounced back to $4,220, while the crypto market continued to fluctuate within its range.

A closer look at the data reveals that small businesses were hit the hardest by layoffs this time. Companies with fewer than 50 employees cut 120,000 jobs in a single month—the harshest since March 2023. Tough times for small businesses indicate that both demand and the financing environment are tightening. Wage growth has also dropped to 4.4%, so inflationary pressures have indeed eased marginally. The market now believes the probability of a 25 basis point rate cut in December is close to 90%, the dollar has started to fluctuate sharply, and risk assets are being repriced.

On the crypto side, there’s a clear divergence in capital flows. BTC spot ETFs saw a net outflow of $14.9 million in a single day, while ETH saw a net inflow of $140.2 million—money is clearly moving toward the Ethereum ecosystem. The liquidation data over the past 24 hours is also interesting: BTC long liquidations totaled $45.07 million, shorts $50.73 million; ETH long liquidations were $26.38 million, but shorts were a whopping $103.37 million. ETH shorts got hit pretty hard, and short-term volatility remains high. Right now, whether BTC can hold $93,000 is key; if that breaks, $90,500 is the next support level.

Some analysts point out that weaker employment plus rising rate cut expectations mean the market is entering a “macro inflection expectation + internal crypto capital rotation” composite phase. Judging from ETF flows and liquidation structure, risk appetite is diverging rather than expanding across the board, so the short-term outlook remains one of structural volatility. Going forward, keep an eye on whether rate expectations will be revised down further, and whether capital will continue to flow from Bitcoin to high-beta assets—these will determine the risk level and slope of the next market move.

RebaseVictim · Accepted Answer

The employment data is crashing, small businesses are laying people off... Does this really mean a rate cut is coming? Then BTC should have taken off by now, so why is it still dragging its feet?

It's not surprising that funds are moving to ETH—BTC just doesn't feel as attractive this time around.

Small businesses cutting 120,000 jobs, that's really rough. Is inflation finally starting to ease up?

90% probability of a rate cut... The USD is really fluctuating, and risk assets definitely need to be reassessed.

The Fed is meeting in December, feels like it's going to be another month of watching from the sidelines. Even gold has bounced back.

NFTragedy · Answer

Small businesses slashed 120,000 jobs—this data is truly wild. With rate cut expectations running so high, the crypto market is really about to heat up.

NotSatoshi · Answer

Small businesses can’t hold on any longer. Once this data is released, the Fed will have no choice but to cut interest rates. When that happens, the dollar will plunge, and it’ll be our turn to take off.

UncleWhale · Answer

Small businesses cut 120,000 jobs? Now that's a real reason to cut interest rates. No wonder the capital is fleeing.

PanicSeller · Answer

120,000 layoffs at small businesses? Fine, if the Fed doesn’t cut rates soon, it’s doomed. The crypto space is going to benefit from this wave.