The US dollar came under pressure on Tuesday after a pair of disappointing economic releases overshadowed hawkish remarks from former Fed governor Kevin Warsh, fueling expectations that the Federal Reserve will cut interest rates sooner than previously thought—a development that could benefit Bitcoin and other risk-sensitive cryptocurrencies.
The Institute for Supply Management (ISM) Manufacturing PMI fell to 48.5 in March, missing the 49.1 forecast and pointing to contraction in the sector. At the same time, the JOLTS survey showed job openings dropping to 8.74 million, the lowest since May 2021. The soft data pushed market-implied odds of a June rate cut to 65%, according to the CME FedWatch Tool, up from 58% a week ago.
Warsh, a potential Treasury Secretary candidate in a future Trump administration, argued against premature rate cuts, calling for a cautious stance to avoid re-igniting inflation. However, traders largely ignored his comments, focusing instead on the weakening economic picture, which suggests the Fed may need to ease policy to support growth. A lower interest rate environment typically reduces the dollar’s yield advantage, making it less attractive relative to other currencies and often driving investors toward alternative stores of value like Bitcoin.
For crypto markets, the immediate takeaway is that any sustained dollar weakness on the back of further soft data—especially this Friday’s nonfarm payrolls report—could strengthen the bid for Bitcoin and ether. Historically, falling real yields and expectations of looser monetary policy have coincided with rallies in digital assets. With Bitcoin hovering near key resistance levels, a break above $75,000 could materialize if the labor market data confirms the cooling trend.
That said, macro uncertainty remains elevated. If Friday’s payrolls surprise to the upside, the dollar could rebound quickly, pressuring crypto prices. Traders will also keep an eye on UK GDP and inflation figures due later this week, as the health of global economies can influence broader risk sentiment.
