Bitcoin price pulled back Friday after stronger-than-expected US jobs data pushed traders to raise expectations for a Federal Reserve rate hike.
BTC fell about 2.7% to below $79,300 after reaching a four-month high of $82,240 earlier in the session.
Bitcoin Price Today: BTC Falls Below $79,300
The Bitcoin price climbed to $82,240 during early Friday trading in Europe, gaining roughly 6.8% over 24 hours and reaching its highest level since May.
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The rally lost momentum after the latest US jobs report showed that the labor market remained stronger than economists expected.
Bitcoin subsequently fell about 2.7% to below $79,300 as Treasury yields rose and expectations for near-term Federal Reserve easing weakened.
US Jobs Report Beats Expectations in August
According to the US Bureau of Labor Statistics’ August jobs report, the US economy added 162,000 jobs in August, far exceeding economists’ expectations for around 56,000. The unemployment rate held steady at 4.1%.
Restaurants and bars did the heavy lifting, adding 59,000 jobs. Manufacturing employment continued to rise as well, gaining 16,000 jobs.
The information sector was the main weak spot, shedding 23,000 jobs. The decline included losses in computing infrastructure, data processing, web hosting, publishing and broadcasting.
Wage growth remained relatively steady, with average hourly earnings rising 3.1% year over year. Monthly wages increased 0.3%.
The stronger labor-market data add to the hawkish backdrop created by Federal Reserve Governor Christopher Waller’s comments on Thursday. Waller said he would support keeping rates steady at the September meeting if incoming inflation data continued to cool.
Bitcoin News: Markets Reprice Fed Rate Hike Bets
Markets reacted quickly to the report, with traders increasing expectations for a September rate hike.
The stronger employment figures reduced expectations for near-term Fed easing and pushed Treasury yields higher. The 10-year Treasury yield jumped 3.3 basis points to 4.80%, reflecting a stronger interest-rate outlook following the data.
US stock futures also weakened. Dow futures fell 151 points, or 0.3%, while S&P 500 futures declined 0.2%. Nasdaq futures were little changed, rising around 0.1%.
For Bitcoin, the shift in rate expectations created a headwind for the rally that had pushed BTC to its highest level in four months.
Fed Chair Kevin Warsh had already put a September rate hike on the table with his hawkish Jackson Hole speech a week earlier, and the stronger jobs report reinforced expectations that the Fed may keep monetary policy tighter for longer.
Waller’s Dovish Signal Meets Strong Jobs Report
Federal Reserve Governor Christopher Waller’s comments on Thursday had eased concerns about another Fed rate hike, but Friday’s jobs report delivered a stronger signal from the labor market.
On September 3, Waller said he would support holding the Fed’s policy rate steady at the September meeting if incoming inflation data continued to cool.
The total crypto market capitalization rose more than 3.7% to $2.814 trillion. US-listed spot Bitcoin ETFs recorded roughly $730 million in net inflows on September 3, their strongest single-day haul since January.
Why This Matters for Bitcoin Price
The stronger-than-expected jobs report complicates the dovish outlook that helped drive the Bitcoin price higher on Thursday.Â
It also reinforces the hawkish Fed policy outlook signaled by Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium a week earlier.
Markets are now pricing in higher odds of a September rate hike, and risk assets, including Bitcoin, are reacting negatively in real time.
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