Written by: ChandlerZ, Foresight News
The U.S. Department of Labor will release the U.S. November non-farm payroll data today. This data was originally scheduled for release on December 5 but was postponed due to the recent U.S. government shutdown.
On the eve of the non-farm payroll data release, global assets have collectively entered a 'brake mode'. The three major U.S. stock indices fell slightly, with the Nasdaq and technology stocks leading the pullback, and AI-related stocks continued to be sold off; the volatility of U.S. Treasury bonds dropped to its lowest level since May of last year, with the yield on the 10-year U.S. Treasury bond only slightly declining by 0.5 basis points, while the U.S. dollar index recorded four consecutive declines, and the offshore yuan temporarily broke above the 7.04 mark.
In such an atmosphere where 'stocks, bonds, and currencies are unwilling to bet on direction,' crypto assets have also entered a phase of adjustment, with Bitcoin once dipping to the $85,000 mark and Ethereum briefly falling below $2,900. According to Coinglass data, in the past 24 hours, a total of $582 million has been liquidated across the network, with $508 million from long positions and $74.3739 million from short positions. Among them, Ethereum liquidated $186 million and Bitcoin liquidated $174 million.
It seems this is yet another 'non-farm night.' Before the key data is released, investors are reluctant to heavily bet on any direction.
The Fed chair race: Hassett vs. Warsh
Who will lead the Fed is becoming one of the key variables that swing the yield curve and inflation expectations. Hassett, once considered a shoo-in candidate, has recently faced notable undercurrents. Several heavyweight figures who can directly advise Trump are cautious about his leadership of the Fed, and what truly worries them is not Hassett's professional background, but his too-close relationship with Trump.
Once the market believes that the new chair is more like an extension of the president rather than a relatively independent central bank head, it may lack sufficient determination to tighten further when inflation rises in the future, thus U.S. Treasury long-term yields may express distrust by resisting upward movements, ultimately leading to high government financing costs, contrasting sharply with the White House's desire to maintain low interest rates and steady growth.
This concern has already been reflected in market expectations. Trump had previously signaled that he had an answer in mind, but later, in an interview with The Wall Street Journal, he changed his tone, listing Hassett and former Fed governor Warsh as 'front-runners,' stating, 'Both Kevins are excellent.'
This statement immediately triggered a chain reaction in the prediction market. In the Polymarket prediction event 'Who will Trump nominate as Fed chair?', the market currently bets that Kevin Warsh has the highest probability of being elected at 49% (up 10%); the second place is Kevin Hassett, currently at 41% (down 12%).
What is even more intriguing is that the change in wind direction this time has not been achieved through public criticism of Hassett, but rather through the continuous elevation of Warsh. This includes the CEO of JPMorgan Chase, Dimon, affirming both of their professional capabilities while being interpreted by many attendees as being 'more inclined towards Warsh.'
In the face of skepticism, Hassett deliberately drew a line in a recent interview, emphasizing the Fed's independence in interest rate decisions, stating that the president's views do not carry equal weight with those of the governors and FOMC members, and that the final decision will still be reached through internal discussions. Trump, on the other hand, emphasized that he should be heard as a smart voice, hoping the new chair would closely communicate with him on interest rate issues, while also acknowledging that the Fed should not become a mere executor of presidential will.
This seemingly subtle combination of statements actually outlines a clear reality: whether it is Hassett or Warsh that ultimately takes the helm, the new Fed will operate under a much stronger political spotlight, and the market will price this new balance of 'politics—monetary relations' through long-term rates, inflation expectations, and even dollar trends.
For a highly sensitive macro asset like Bitcoin, who becomes the next Fed chair will influence the market's judgment on future real interest rate ranges, the boundaries of monetary easing, and the dollar cycle, all of which will ultimately leave clear echoes on Bitcoin's volatility and medium to long-term trends.
Previous non-farm scripts
Based on past experiences, every time there is a macro key point like non-farm data, the crypto market, especially Bitcoin, tends to follow a relatively fixed script. In the period leading up to the data release, the market enters a phase of first contraction and then explosion, with leverage gradually cooling and volatility suppressed, as funds are primarily betting on expectations; whereas on the night the data is released, a rapid tug-of-war occurs within a short time to quickly reprice the entire chain of 'employment—inflation—interest rates.' This time, the non-farm report is very likely to be no exception.
In terms of specific trading, the biggest significance of this non-farm report lies in how it may reshape the market's judgment on inflation stickiness and interest rate cuts through employment and wage growth, thereby transmitting to the crypto market via the dollar index—U.S. Treasury yields—real interest rates. If the November non-farm payrolls and wages significantly exceed expectations, market confidence in inflation having entered a controllable downward channel will be weakened, and the duration of high interest rates may be forced to extend, resulting in upward pressure on U.S. Treasury yields and real interest rates, with conditions for the dollar index to end its previous consecutive declines. Against a backdrop of already pressured tech stocks and a general cooling of risk appetite, Bitcoin is likely to endure a new round of adjustments, with the risks of high leverage and crowded long positions passively de-leveraging increasing.
If the overall data roughly meets expectations, with employment and wages falling within a moderately cooling range, the market's narrative about a soft landing will remain stable, and U.S. Treasuries and the dollar are more likely to fluctuate within existing ranges, with real interest rates also only oscillating within limited bounds. In this case, Bitcoin may experience wide fluctuations with increased volume on the day the data is released, but will likely return to its original range afterward, with the true determinants of price still being subsequent inflation data, the Fed's communication tone, and the repricing of interest rate cut timelines for next year.
However, if non-farm employment and wage data are significantly weaker than expected, showing sufficient signals of cooling in employment, the market will tend to price in a more accommodative policy path ahead of time, bringing forward interest rate cut expectations, lowering the overall yield curve, reducing real interest rates, and putting pressure on the dollar. The medium-term logic for gold will be further reinforced in such an environment, while Bitcoin often becomes the asset that responds first and with the largest magnitude to such repricing. Once funds confirm that weak data does not equate to a systemic recession, but rather opens up space for easing, macro funds chasing elasticity and beta may once again increase their positions in Bitcoin and mainstream crypto assets.
However, if the data is weak enough to trigger panic over a hard landing, the sequence of asset allocation is likely to change to first reduce risk assets, then increase holdings in government bonds and cash, making it difficult for Bitcoin to remain unaffected in the short term.
