Bitcoin Tumbles As Non-Farm Payrolls Surge To 162K In August

Bitcoin gave up its sharp rally on Friday after the latest U.S. jobs report came in much stronger than expected, prompting traders to reassess the outlook for Federal Reserve policy. Earlier, the BTC price pushed to a new intra-day price high above $82,000. However, heavy selling pushed Bitcoin back under the critical $80,000 mark as markets now price in a Fed rate hike.

Bitcoin Slides Below $80K After Stronger-Than-Expected Jobs Report

Bitcoin first surged to an intraday high of $82,262.21 today, but lost ground following the release of the U.S. employment report. It dropped from approximately $81,600 to almost $79,800 in just a few minutes, wiping out over $2,400 and dropping below the crucial $80,000 threshold. At press time, the BTC price stood at $76,795, still up by 1.64% but it lost steam compared to the 4% rally earlier in the day.

The sell-off was triggered by a nonfarm payrolls report released on August 5, indicating the U.S. economy created 162,000 jobs compared with a median forecast from the big Wall Street banks of 55,000. The unemployment rate stayed flat at 4.1%, and average hourly earnings increased 0.3% in the month and 3.1% in the 12 months leading up to July.

The report also had upward revisions of 55,000 jobs for June and July, further supporting the idea that the labor market continues to be robust compared with what many investors may have thought.

Fed Rate Expectations Weigh On Crypto Markets

The robust U.S. job data lowered hopes that the Fed will soon begin to curtail its stimulus measures. A strong labor market will provide policymakers with room to continue keeping borrowing costs higher when inflation is higher, which in turn means more pressure on riskier assets such as cryptocurrencies.

Prediction markets price in September Fed rate decision odds at 53% for a 25-basis point rate hike at the Sept. 15-16 FOMC meeting, up from last week’s 51%. When interest rates rise, fixed-income securities tend to be more attractive investments and currencies like Bitcoin and digital assets less attractive.

Now investors have turned to the next set of U.S. CPI and PPI inflation data and the Fed’s policy decision later this month. Bitcoin is up from these previous week lows but is likely to be volatile as markets grapple with the new Fed interest rate outlook.

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