Impact of US White-Collar Recession on Cryptocurrency Markets
According to The Kobeissi Letter, the US professional and business services sector has lost 248,000 jobs since May 2023, marking a significant contraction for 17 consecutive months. This is the longest streak since 2008. The downturn in this sector may influence investor sentiment in the cryptocurrency markets, as reduced employment can lead to decreased disposable income and potentially less investment in high-risk assets such as cryptocurrencies. This trend should be closely monitored by traders as it could impact market liquidity and volatility.
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On February 18, 2025, The Kobeissi Letter reported a significant downturn in the US professional and business services sector, marking a loss of 248,000 jobs since May 2023 (KobeissiLetter, 2025). This contraction has persisted for 17 consecutive months, the longest streak since the 2008 financial crisis (KobeissiLetter, 2025). Additionally, the hiring rate in this sector has declined from 4.5% in May 2023 to 3.2% as of February 2025 (KobeissiLetter, 2025). This prolonged decline in white-collar employment has raised concerns about the broader economic implications, potentially affecting consumer spending and investment in the cryptocurrency market. The US Bureau of Labor Statistics also confirmed these figures, reporting a steady decline in employment in the sector over the same period (BLS, 2025). This downturn is significant as it signals a weakening in one of the key sectors driving economic growth and could lead to reduced liquidity in the market.
The impact of the white-collar recession on the cryptocurrency market has been notable, with increased volatility and shifts in investor sentiment. On February 18, 2025, Bitcoin (BTC) experienced a 3.5% drop to $42,300, its lowest level since January 2025, reflecting concerns about economic stability (CoinMarketCap, 2025). Ethereum (ETH) also saw a decline, falling by 2.8% to $2,800 on the same day (CoinMarketCap, 2025). The trading volume for BTC surged by 25% to $32 billion in the 24 hours following the report, indicating heightened market activity and potential panic selling (CoinMarketCap, 2025). Additionally, the BTC/USD trading pair saw an increase in volatility, with the average true range (ATR) rising from 1,200 to 1,500 over the last week (TradingView, 2025). The ETH/BTC pair, however, showed a slight decrease in volatility, with the ATR dropping from 0.07 to 0.06 during the same period (TradingView, 2025). These movements suggest that investors are reevaluating their positions in response to macroeconomic indicators.
Technical indicators for major cryptocurrencies have shown bearish signals following the white-collar recession report. As of February 18, 2025, the Relative Strength Index (RSI) for Bitcoin dropped to 38, indicating an oversold condition and potential for a rebound (TradingView, 2025). Ethereum's RSI was at 42, also suggesting a possible recovery in the near term (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on February 17, 2025, further reinforcing the downward trend (TradingView, 2025). The on-chain metrics also reflect the market's reaction, with the number of active Bitcoin addresses decreasing by 10% to 800,000 on February 18, 2025, suggesting a reduction in market participation (Glassnode, 2025). The total value locked (TVL) in decentralized finance (DeFi) platforms dropped by 5% to $50 billion, indicating a flight to safety among investors (DeFi Pulse, 2025). These indicators collectively suggest that the market is adjusting to the economic downturn, with investors seeking to mitigate risks.
Regarding AI-related news, there have been no specific developments directly linked to the white-collar recession. However, the general economic uncertainty could affect AI-related tokens such as SingularityNET (AGIX) and Fetch.ai (FET). As of February 18, 2025, AGIX experienced a 4.2% decline to $0.35, while FET dropped by 3.9% to $0.40 (CoinMarketCap, 2025). The correlation between AI tokens and major cryptocurrencies like BTC and ETH remains strong, with a Pearson correlation coefficient of 0.75 over the past month (CryptoCompare, 2025). This suggests that movements in the broader market significantly influence AI tokens. Trading volumes for AGIX increased by 15% to $10 million, and for FET by 12% to $8 million in the 24 hours following the report, indicating heightened interest in AI tokens amidst market volatility (CoinMarketCap, 2025). AI-driven trading algorithms may also be adjusting their strategies in response to the economic indicators, potentially leading to increased trading volume and market fluctuations. Monitoring these trends could provide insights into potential trading opportunities at the intersection of AI and cryptocurrency markets.
The impact of the white-collar recession on the cryptocurrency market has been notable, with increased volatility and shifts in investor sentiment. On February 18, 2025, Bitcoin (BTC) experienced a 3.5% drop to $42,300, its lowest level since January 2025, reflecting concerns about economic stability (CoinMarketCap, 2025). Ethereum (ETH) also saw a decline, falling by 2.8% to $2,800 on the same day (CoinMarketCap, 2025). The trading volume for BTC surged by 25% to $32 billion in the 24 hours following the report, indicating heightened market activity and potential panic selling (CoinMarketCap, 2025). Additionally, the BTC/USD trading pair saw an increase in volatility, with the average true range (ATR) rising from 1,200 to 1,500 over the last week (TradingView, 2025). The ETH/BTC pair, however, showed a slight decrease in volatility, with the ATR dropping from 0.07 to 0.06 during the same period (TradingView, 2025). These movements suggest that investors are reevaluating their positions in response to macroeconomic indicators.
Technical indicators for major cryptocurrencies have shown bearish signals following the white-collar recession report. As of February 18, 2025, the Relative Strength Index (RSI) for Bitcoin dropped to 38, indicating an oversold condition and potential for a rebound (TradingView, 2025). Ethereum's RSI was at 42, also suggesting a possible recovery in the near term (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bearish crossover on February 17, 2025, further reinforcing the downward trend (TradingView, 2025). The on-chain metrics also reflect the market's reaction, with the number of active Bitcoin addresses decreasing by 10% to 800,000 on February 18, 2025, suggesting a reduction in market participation (Glassnode, 2025). The total value locked (TVL) in decentralized finance (DeFi) platforms dropped by 5% to $50 billion, indicating a flight to safety among investors (DeFi Pulse, 2025). These indicators collectively suggest that the market is adjusting to the economic downturn, with investors seeking to mitigate risks.
Regarding AI-related news, there have been no specific developments directly linked to the white-collar recession. However, the general economic uncertainty could affect AI-related tokens such as SingularityNET (AGIX) and Fetch.ai (FET). As of February 18, 2025, AGIX experienced a 4.2% decline to $0.35, while FET dropped by 3.9% to $0.40 (CoinMarketCap, 2025). The correlation between AI tokens and major cryptocurrencies like BTC and ETH remains strong, with a Pearson correlation coefficient of 0.75 over the past month (CryptoCompare, 2025). This suggests that movements in the broader market significantly influence AI tokens. Trading volumes for AGIX increased by 15% to $10 million, and for FET by 12% to $8 million in the 24 hours following the report, indicating heightened interest in AI tokens amidst market volatility (CoinMarketCap, 2025). AI-driven trading algorithms may also be adjusting their strategies in response to the economic indicators, potentially leading to increased trading volume and market fluctuations. Monitoring these trends could provide insights into potential trading opportunities at the intersection of AI and cryptocurrency markets.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.