Bitcoin (BTC) is on the back foot ahead of the key U.S. data release, which could bring pain to risk assets, including cryptocurrencies.

At press time, bitcoin was changing hands at $34,235, representing a 2% drop on the day, CoinDesk data show. Prices briefly topped the $36,000 mark early this week, extending past week’s 15% surge from near $30,000.

At 12:30 UTC, the U.S. Labor Department will release nonfarm payrolls data, which is expected to show the world’s largest economy added 180,000 jobs in October, marking a sharp slowdown from September’s 336,000 additions.

The jobless rate is forecast to hold steady at 3.8%, while the year-on-year growth in average hourly earnings likely slowed to 4% from 4.2%.

Per Ilan Solot, co-head of digital assets at Marex Solutions, better-than-expected jobs data may weigh over risk assets.

“Good data is bad for markets – The overly eager dovish interpretation of Powell’s comments heightens the risk around an upside surprise for today’s NFP data. A soft jobs data will probably propel markets higher,” Solot said in X.

The Federal Reserve held the benchmark borrowing cost unchanged at 5.25% early this week while explicitly mentioning that tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring and inflation.

That has convinced markets that the Fed’s tightening cycle has ended, and the next move will likely be a rate cut. The Fed started its tightening cycle in March last year and has since raised rates by 525 basis points. The rapid-fire rate hikes were partly responsible for the last year’s crypto crash.

A better-than-expected jobs figure may dent the dovish conviction, boosting the dollar index and adding downside pressures around bitcoin.