Bitcoin's Figure 8 Brace: How U.S. Jobs Data Could Trigger Market Swings

Crypto markets are holding their breath as major economic data points loom on the horizon. With employment figures and retail sales reports about to hit the wires, traders are bracing for potential turbulence that could reshape the near-term trajectory of digital assets. The stakes are high, and the technical setup tells an interesting story about where Bitcoin might find support—or fail to hold it.

Employment Report Looms: Why This Jobs Data Matters for Crypto

The employment report is far more than a headline for traditional economists. For the crypto space, labor market data serves as a critical barometer for overall economic health and, more importantly, for Federal Reserve policy decisions. A stronger-than-expected jobs number typically reinforces expectations for sticky interest rates or even further rate hikes, which historically dampens appetite for riskier assets like Bitcoin. Conversely, weaker data signals economic cooling and opens the door for more aggressive monetary easing—exactly the kind of environment that has historically supported Bitcoin’s price action.

As Linh Tran, a senior market analyst at XS.com, explained in recent commentary, a softer-than-anticipated employment report could strengthen the case for more dovish Fed action. “A weaker-than-expected employment report could reinforce the view that the U.S. economy is slowing more noticeably, thereby strengthening expectations for more aggressive monetary easing,” Tran noted. Lower rates typically revive risk appetite, potentially sending Bitcoin and the broader crypto market higher—but that’s not guaranteed in the current environment.

The challenge right now is that market sentiment has turned decidedly pessimistic. Bitcoin is trading around $78,640, down nearly 5% over the past 24 hours, while Ethereum has shed more than 8%. The wider crypto market capitalization is hovering near $1.57 trillion, with the CoinDesk 20 (CD20) and CoinDesk 80 (CD80) indices both off by more than 5%.

Breaking Below the Figure 8 Brace: What the Charts Tell Us

For those tracking Bitcoin’s technical setup, the current price action is sending a concerning signal. The chart reveals that Bitcoin has broken below a critical support level formed by connecting November and early December lows—what technical analysts refer to as a figure 8 brace support structure. This pattern, named for its distinctive shape, typically acts as a floor for prices during corrective phases. When Bitcoin fails to hold above this figure 8 brace formation, it often signals weakness and opens the door to testing lower support levels.

The breakdown below the figure 8 brace is consistent with the broader downtrend that has persisted since early October. According to technical indicators tracked by CoinDesk’s Bitcoin Trend Indicator (BTI), we’re now in the fourth consecutive day of a significant downtrend. The implied volatility index maintained by Volmex suggests the market is pricing in an annualized volatility range of 40% to 60%—substantial but not yet suggesting extreme fear.

Bitcoin bulls will be watching for a potential retest of recent lows near $80,000. If that level fails to hold, the figure 8 brace’s breakdown could be the technical confirmation that traders feared, potentially opening the door to even deeper weakness. For contrarian traders or those with longer time horizons, this could represent a capitulation opportunity, but the technical picture isn’t screaming “buy” right now.

Weak Capital Flows Signal Cautious Market Sentiment

Beyond the price action, the fundamentals are showing cracks. Institutional demand for crypto-linked investment vehicles has notably cooled. On a single day recently, U.S.-listed spot Bitcoin ETFs recorded a net outflow of $357.6 million—the largest daily outflow in recent weeks. Ethereum ETFs experienced similar pressure, with $224.8 million flowing out.

Perhaps more concerning is what’s happening in the stablecoin space. Growth rates have decelerated sharply, signaling that fresh fiat capital inflows into crypto have begun to slow. Matrixport, the crypto-focused financial services platform, highlighted this dynamic in recent analysis: “Even if absolute growth remains respectable, deceleration in stablecoin growth rates points to a less bullish liquidity backdrop for crypto markets than many had anticipated.”

The message from capital flows is clear: money isn’t rushing into crypto right now. For Bitcoin to overcome the figure 8 brace breakdown and stage a meaningful recovery, we’d need to see a reversal in this trend—either through employment data triggering a genuine risk-on rally or through some other catalyst that restores confidence in digital assets.

The Macro Backdrop: Fed Expectations and International Dynamics

What makes the employment data release so critical is the connection between labor market strength and monetary policy. The Federal Reserve has been walking a tightrope, and labor market data helps determine whether that tightrope is moving up or down. The current 10-year Treasury yield remains sticky above 4% despite last week’s Fed rate cut, suggesting the market isn’t fully convinced of a dovish pivot.

Interestingly, international currency markets are sending mixed signals. The Chinese yuan recently hit two-month highs against the dollar. Historically, a weaker yuan has been associated with capital outflows from China into cryptocurrencies. A stronger yuan—and the concurrent resilience of the dollar index—could theoretically work against Bitcoin in the near term. Gold, traditionally a risk-off asset like Bitcoin, has also retreated from recent highs, pulling back from around $4,350 to $4,277 per ounce, having tested a record of $4,381.48 earlier.

What Traders Should Watch as Volatility Braces

For traders navigating this environment, several scenarios deserve attention. If the employment data comes in weaker than expected, we could see a sharp rally that tests whether Bitcoin can reclaim its figure 8 brace support. Such a move would require breaking through the breakdown—a double-dip that would suggest strong rejection of lower prices.

On the flip side, stronger employment data would likely confirm the bearish technical picture and could send Bitcoin toward those lower lows near $80,000. The “pain trade” in either direction appears to be on the higher side given the dour market sentiment, meaning traders are more likely to suffer losses if they’re not positioned correctly.

For longer-term believers in Bitcoin and crypto, the current weakness could represent opportunity—especially if the employment data triggers the dovish monetary policy response that many in the space are hoping for. But for now, that optimism appears to be in the minority. The figure 8 brace breakdown has spoken, and until proven otherwise, Bitcoin traders should maintain appropriate caution.

The next few hours will be telling. The employment report will either validate the bearish technical setup or provide the spark for a meaningful reversal. Either way, volatility is coming—traders should ensure their positions are sized appropriately for the moves ahead.