Bitcoin Extends Losses on Trade Deficit Despite Strong Jobs Data

▲ Bitcoin (BTC) Decline / ChatGPT-Generated Image

Bitcoin (BTC) fell below the $66,000 level as it faced external headwinds, including lower-than-expected U.S. jobless claims and a sharply widening trade deficit.

According to financial outlet BeInCrypto on February 19 (local time), the U.S. Department of Labor reported that initial jobless claims totaled 206,000 last week. This figure was lower than market expectations of 225,000 and below the previous week’s revised figure of 229,000. While the data indicates that the labor market remains resilient, investors interpreted it as a signal that the Federal Reserve’s tightening stance could be prolonged.

U.S. trade balance data released at the same time further fueled risk-off sentiment in the market. The U.S. Treasury announced that the trade deficit for January reached $70.3 billion, significantly exceeding market forecasts of $55.5 billion and the previous figure of $53.0 billion. Although domestic demand remains solid, declining exports and rising imports have raised concerns about growing external economic imbalances.

The conflicting economic signals of labor market strength and an expanding trade deficit immediately exerted downward pressure on the cryptocurrency market. Following the data release, Bitcoin extended its losses and dropped below $66,000, dragging other major cryptocurrencies lower as well. Amid heightened economic uncertainty, investors took a cautious approach by reducing their exposure to risk assets such as Bitcoin.

Signs of slowing inflation were not enough to support prices. According to Truflation data, inflation has remained below 1% since early February, but technical selling pressure prevented Bitcoin from staging a rebound. Market experts analyzed that the combination of strong employment indicators and a massive trade deficit could lead Bitcoin to undergo a short-term bottoming process.

Bitcoin’s future price direction is expected to depend on the upcoming release of the December Personal Consumption Expenditures (PCE) price index and the revised fourth-quarter GDP figures. The cryptocurrency market has now entered a period of heightened volatility amid mixed macroeconomic indicators. Investors are maintaining a wait-and-see stance as they monitor additional economic data and are likely to continue a conservative approach until market volatility eases.

Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.