After dipping to a local bottom of $112,368, Bitcoin has managed to claw back some ground, currently trading near $115 105. This move has provided a boost to the broader crypto market, with leading altcoins like Ethereum (ETH) advancing 1.4% on the day to trade at $3722.

However, overall market sentiment remains notably bearish. According to betting data from Polymarket, a majority of traders expect Bitcoin to fall below the psychologically significant $100,000 level before year-end, reflecting persistent anxiety over the global macro backdrop, Arthur Hayes: Why Bitcoin Could Revisit $100K This Cycle

The latest driver of pessimism comes from the US labor market. Unemployment has ticked up from 4.1% to 4.2%, sparking renewed fears of stagflation as inflation remains elevated. Federal Reserve Governor Lisa Cook recently described the latest jobs report and its gloomy outlook as "worrisome," noting that such corrections often accompany key inflection points for the US economy. In her comments to Bloomberg, Cook highlighted that rising unemployment could signal a pivotal moment for the economic cycle.

With recession worries mounting, the odds of a Federal Reserve policy shift—commonly known as a "Fed pivot"—are rising. Market participants are increasingly betting that Fed Chair Jerome Powell may lower the key interest rate in the coming months, a move that would likely provide relief to risk assets such as Bitcoin.

Another constructive sign for crypto bulls is the ongoing decline in Bitcoin reserves held on major exchanges. On-chain analytics from CryptoQuant show that the aggregate amount of BTC held by platforms like Kraken, Coinbase has fallen to 2.38 million coins—the lowest level since 2018. This persistent outflow of coins from exchange wallets is typically interpreted as a signal that investors are moving holdings into long-term storage, reducing immediate sell-side pressure on the market.

Bitcoin reserves on exchanges hit a six-year lowBitcoin reserves on exchanges hit a six-year low

In summary, while macro uncertainty and negative labor market trends continue to weigh on sentiment, the ongoing reduction in exchange reserves and the prospect of monetary easing by the Fed could provide the conditions for a potential trend reversal in the crypto market. For now, traders remain divided—watching closely for signals of either renewed downside or the first sparks of a new rally.