Bitcoin [BTC], the largest cryptocurrency globally, reached a low point for the month at $52.5k, a trend echoing the decline in U.S stocks on Friday. This sharp drop came after the release of a disappointing August Jobs report.
The U.S Bureau of Labor Statistics (BLS) reported the creation of 142k jobs in August, falling short of the expected 160k jobs. However, the unemployment rate saw a slight decrease to 4.2%.
Effect on BTC and Future Fed Rate Cut Predictions
The recent U.S Jobs Report holds significant importance for BTC and the broader market, particularly as Fed chair Jerome Powell had previously mentioned that interest rate cuts would be influenced by labor market conditions. This development sparked varied reactions within the community.
Leena ElDeeb, a research analyst at 21Shares, commented to CryptoCrypto that the weak jobs report represents a critical moment for assets like BTC.
“The latest U.S. labor market data is a pivotal moment for Bitcoin and other risk-on assets as the labor market holds the potential to sway the Fed’s rate cut decision this month.”
ElDeeb further stated,
“With a slightly improving unemployment rate, investors reacted positively, anticipating a more accommodative monetary policy by September 18.”
Shortly after the report’s release, the chances of a 0.5% Fed rate cut rapidly rose above 50%, surpassing expectations for a 0.25% cut. However, following a thorough analysis of the data, the odds of a 0.25% rate cut surged to 70% in the early hours of Saturday in Asia.
Bitcoin’s Response to U.S Jobs Data
Post-report, Bitcoin surged to $56.9k initially but retracted swiftly to $52.5k later, marking a monthly low.
Interestingly, the decline to $52k intersected with a weekly bullish order block (OB) and a support level (in cyan) where the plunge in early August had halted.
Therefore, Bitcoin’s dip to $52k could present a promising buying opportunity, especially if the support level remains intact.