The US stock market plunged at the start of the year, and the logic behind this decline is actually quite straightforward.

The S&P 500 has been pulling back from its late-2023 highs, mainly due to one number: the unemployment rate. The latest data shows that in November, the unemployment rate surged to 4.6%, the highest in over four years. Think about it—at the beginning of the year, it was only 3.5%. In just ten months, it increased by 1.1 percentage points, and that speed is indeed notable.

Why is this happening? First, tariff policies have increased corporate costs, and employers' desire to hire has clearly diminished. Second, while the AI boom has boosted tech stocks, other industries are struggling, and job growth has noticeably slowed. Just look at the job vacancy data—November saw only 0.91 vacancies per unemployed person, the lowest level in 14 months.

What is the market most afraid of? Recession signals. Rising unemployment is usually a leading indicator of economic downturns, and historical patterns support this. High-valuation US stocks are particularly sensitive to such negative data; even a small gust of wind can trigger a wave of adjustments. Although the Federal Reserve cut interest rates at the end of last year, there is limited room for further easing by 2026, and investors are beginning to worry whether stagflation risks might really return.

For the crypto market and Bitcoin prices, these macro signals are equally important. Traditional risk assets are slowing down, liquidity conditions are changing, and this will inevitably impact the performance of crypto assets. In the short term, market volatility may intensify, but the key is whether the labor market can stabilize—if January’s employment report shows a rebound, it could change expectations; conversely, if the unemployment rate continues to rise, the correction could deepen.

Overall, now is the time to be vigilant about macro signals and to appropriately allocate defensive assets. While the crypto market has its own logic, its connection to the global liquidity environment has never been broken.