U.S. Unemployment Data Reverses Unexpectedly, Crypto Market Liquidity Faces New Test

In mid-October, a set of delayed unemployment benefit data released retroactively by the U.S. Department of Labor drew market attention. This data, which should have been disclosed weekly but was delayed by half a month due to government shutdown, not only signals a cooling labor market but may also become an important reference for the crypto market’s trend in the coming months. For macro-focused investors, the implications of this abnormal data are far more cautionary than mere price fluctuations.

Three Key Signals Behind Unemployment Data

This retroactive release covers initial unemployment claims data from late September to mid-October, with several details worth noting:

Continuing Claims Reach This Year’s New High

As of the week ending October 18, the number of people receiving ongoing unemployment benefits reached 1.957 million, an increase of 10,000 from the previous week, marking the highest level since March this year. This trend indicates increasing difficulty in re-employment after unemployment, with a clear decline in the labor market’s absorption capacity. The previous narrative of a “strong employment market” is beginning to waver in the face of these data.

Magnitude of Historical Data Revisions Cannot Be Ignored

The initial claims for the week of September 20 were revised upward from 218,000 to 219,000. While the change appears minor, it reflects a systemic underestimation of the slowdown in employment over the past month. Similar revisions involve multiple weeks, leading to adjustments in the four-week moving average, which suggests that the evaluation biases caused by data inconsistencies are gradually surfacing.

Statistical Gaps Still Not Fully Filled

Even after the retroactive release, six sets of data are still missing from the official website. More troubling is that data distortions caused by statistical breaks may be difficult to fully repair. The Federal Reserve relies on employment data as an economic thermometer when setting monetary policy, and when these reference data are flawed, policy decisions’ accuracy is inevitably affected—much like navigating with an incomplete map, increasing the risks.

How Will Liquidity Trends in the Crypto Market Change?

The link between U.S. unemployment data and the crypto market lies in monetary policy. The Fed’s interest rate decisions directly influence liquidity levels in the market, and the crypto asset market is far more sensitive to liquidity changes than traditional finance markets. This abnormal data is expected to trigger market reactions on two levels:

Chain Reaction of Easing Expectations

Worsening unemployment data intensifies market expectations of the Fed’s continued rate cuts in December. Once easing signals are confirmed, abundant liquidity could create valuation repair opportunities for some undervalued quality projects. However, it’s important to clarify that this will not be a broad rally but rather a structural opportunity—only projects with real application prospects and solid fundamentals will attract capital, while blindly chasing air coins will only make investors the bagholders.

Short-term Volatility Expansion as a Double-Edged Sword

Data flaws cause market sentiment to fluctuate unpredictably, and institutional funds will exploit this uncertainty for repeated market manipulation. Recent high volatility—sometimes surging, sometimes plunging—is a test of market direction by capital. During this phase, frequent monitoring often only increases anxiety; a wiser approach is to focus on projects with real use cases, healthy cash flow, and strong fundamentals, which are the true “anchors” in volatile environments.

When Is the Best Window for Deployment?

Based on the upward trend in continuing claims, a further cooling in the labor market is highly probable, which also suggests that the Fed’s easing cycle next year may arrive earlier than expected. However, in the short term, don’t expect a rapid market rally—time is needed for the market to digest the shocks and emotional swings caused by data confusion. From a timeline perspective, clearer opportunities may emerge between late November and early December.

Many investors are puzzled: why did they avoid the crash in September but lose in October’s volatility? The root cause is not effort but understanding the logic behind data changes. Markets are ever-changing, but truly turning points that can alter account returns are rare in a year. This wave of unemployment data and its chain reaction are the most critical nodes at year-end. Rather than being swept along by daily fluctuations, it’s better to use data as a navigation tool to precisely grasp the direction.