In the immediate aftermath of the jobs report, Bitcoin (BTC) saw a slight rise of around 1%, moving to around $56,500. This response illustrates the volatility and correlation of cryptocurrency markets with traditional economic indicators. However, despite this short-term gain, the price of Bitcoin remains down 5% compared to the previous week, suggesting ongoing concerns about market sustainability.. Analysts suggest that Bitcoin’s volatility is closely related to investor sentiment, which can be heavily influenced by macroeconomic developments such as employment data.
The price of Bitcoin has been quick to respond to the report released by the US government because it has been particularly vulnerable to anything coming from the world’s largest economy recently. It rose from $55,500 to $57,000 in a matter of minutes but has failed to beat that level for now.
The data is very positive for cryptocurrencies because nonfarm employment came in below 150K, which could force the Fed to cut interest rates. Analysts from Goldman and other companies said yesterday that this scenario could contribute to the pace of interest rate cuts..
Fed member speaks
Fed member Williams made important statements. Fed members generally use language that tries to downplay anxiety in employment data. While inflation was rising rapidly in 2021, they did the same for increasing inflation. Later, we saw them gradually acknowledge the extent of the risks.
TRON’s unstable currency activity hit new highs after the launch of the Sun.pump meme coin launch platform on August 9.
MultiversX (EGLD) is trading at around $24.80 at the time of writing, losing more than 1% on the day. EGLD could extend its losses by another 12% and fall to its August 5 low of $21.77. The Moving Average Convergence and Divergence Indicator (MACD) shows red histogram bars below the neutral line
Bitcoin nears $57K waiting for interest rate cut
Bitcoin nears $57,000 as markets expect interest rate cuts after weak US jobs data The unemployment rate in August stood at 4.2%, which defied expectations. This means that the unemployment rate has fallen again after hitting 4.3% in July.
Markets expect a 50 basis point rate cut in September amid deteriorating US jobs data. According to U.S. nonfarm payrolls data released on Friday, the U.S. economy added 142,000 jobs in August, lower than expected at 164,000. Bitcoin (BTC) is trading at $56,821, moving quickly towards the $57,000 mark.
The unemployment rate in August exceeded expectations, at 4.2%. This means that unemployment has returned to decline, after the 4.3% recorded in July.
While this data shows that the US labor market has slowed, it also suggests clear warning signs. However, a “soft landing” is still possible. In the immediate aftermath of the report, riskier assets such as Bitcoin briefly jumped, testing $57,000 in response to a weaker dollar due to weak US jobs data.
Based on the Fed’s CME monitoring tool, markets expect a 50 basis point cut in September, as the odds jumped from 30.5% to 55%. Meanwhile, the likelihood of a 25 basis point rate cut has since shrunk to 45%.
Ethereum is trading at less than $2,390 at the time of writing. The second-largest cryptocurrency has recorded steady outflows in its spot ETFs, similar to what has been observed in Bitcoin..
XRP is trading at $0.5440, down 0.10% on the day. Ripple’s request to stop the cash portion of the SEC lawsuit was approved by the U.S. Financial Regulatory Authority.
Interest Rate Cuts Could Revive Cryptocurrency Prices
US job growth in August fell short of expectations, with the economy adding 142,000 jobs compared to the expected 160,000, though the numbers were an improvement from the revised 89,000 jobs in July.
However, the weak performance is unlikely to prompt the Federal Reserve to begin cutting interest rates this month, including a potential 50 basis point adjustment. Following the release of the nonfarm payrolls report, the unemployment rate fell to 4.2%, in line with expectations and down slightly from 4.3% in July.
Bitcoin, which had fallen significantly ahead of the report, staged a slight recovery of around 1.7%, reaching $57,000 shortly after the data was released. However, it is still down 4.5% from the previous week.
The August jobs report was particularly important because the Fed is expected to begin cutting interest rates in mid-September. Most people thought the Fed would be dovish and cut rates by only 25 basis points.
However, weaker August jobs numbers could push them to make a larger 50bp cut. However, the headline data, especially after the revised June and July job growth numbers, doesn’t really support a big rate cut. If we see a 25bp rate cut, the crypto market could feel the positive impact, leading to an immediate rally in Bitcoin towards $60,000.
Is September Following a Bearish Trend?
September has often been a tough month for cryptocurrencies, showing negative returns in eight of the past nine years. With the pressure from August and the continued bearish performance, September 2024 could also be leaning towards a bearish trend.
