Key Points
- The U.S. added fewer jobs than expected in August, causing Bitcoin to drop to a monthly low.
- However, aggressive bets on Federal rate cuts increased after the jobs report was released.
The United States added 142,000 jobs in August, falling short of the anticipated 160,000. This unexpected shortfall mirrored a decline in U.S. stocks and impacted the value of Bitcoin (BTC).
The world’s largest cryptocurrency, Bitcoin, fell to a monthly low of $52.5k following the release of the jobs report. This report, released by the U.S. Bureau of Labor Statistics (BLS), is crucial to Bitcoin and the wider market.
Effects on Bitcoin and the Federal Interest Rate
Federal Reserve Chair Jerome Powell had previously indicated that the pace of interest rate cuts would depend on the state of the labor markets. This statement put the spotlight on the jobs report.
Leena ElDeeb, a research analyst at digital asset manager 21Shares, explained that the weak jobs report served as a ‘moment of truth’ for risk-on assets like Bitcoin. She stated that the labor market could influence the Federal Reserve’s decision to cut rates this month.
Despite an improving unemployment rate, the market reacted positively. Investors anticipated a looser monetary policy on September 18. After the release of the report, aggressive bets on a 0.5% Federal rate cut surged above 50%, surpassing the odds of a 0.25% cut.
Bitcoin’s Reaction to the Jobs Report
Following the release of the jobs report, Bitcoin’s value increased to $56.9k. However, this was short-lived, and the cryptocurrency quickly fell to $52.5k, marking a monthly low.
The drop to $52k hit a weekly bullish order block and support level that halted the early August plunge. Thus, Bitcoin’s fall to $52k could present a valuable buying opportunity, particularly if the support holds.
