Bitcoin (CRYPTO: BTC) dropped below $70,000 on Friday morning after the U.S. economy unexpectedly shed 92,000 jobs in February, and macro analyst Benjamin Cowen warned the March rally was a textbook bull trap that may now be over.

What Happened

Nonfarm payrolls came in at negative 92,000, far below the 59,000 consensus and a sharp reversal from January’s revised 126,000 gain. Unemployment rose to 4.4%.

The SPDR S&P 500 ETF Trust (NYSE:SPY) fell below 6,800 as oil headed for its biggest weekly gain since the early days of the Ukraine war.

Cowen argues the Fed is now trapped.

It cannot cut rates aggressively to save the labor market because energy prices are surging amid the Iran conflict.

Job openings per unemployed worker have dropped below 1.0 and the U.S. has added just 156,000 jobs over the past year, dangerously close to the zero line that has historically preceded recessions.

BTC peaked around $74,500 on March 4 before rolling over.

Cowen noted that mirrors the exact pattern from 2014, 2018 and 2022, where midterm-year relief rallies topped in the first week of March, then capitulated into spring.

He flagged $40,000 as a potential target for the next major low.

Where Polymarket Sees Crypto Heading

Polymarket’s March BTC price market, which has drawn $20 million in volume, prices a 24% chance Bitcoin hits $85,000 this month, a 10% chance of $85,000 and a 36% chance of going under $60,000.

The annual market gives BTC a 48% chance that it dips to $45,000, nearly a coin flip on another huge drawdown.

Bettors give Bitcoin only a 28% chance of outperforming gold in 2026.

Gold is up over 1% today and trading at $5,152.

Why It Matters

Not everyone is bearish. Arthur Hayes argued this week that every major U.S. military engagement in the Middle East since 1985 was followed by monetary expansion, and that a prolonged Iran conflict may force the Fed to print regardless of inflation.

Polymarket’s Fed rate cut market has one and two cuts this year tied at 28% each.

But institutions aren’t waiting around for the pivot.

Spot Bitcoin ETFs recorded $228 million in net outflows on Thursday, reversing three days of inflows, and Coinbase Global Inc (NASDAQ:COIN) is trading at $196, down 5% today and 18% year to date.

Image: Shutterstock