Key Points
- The U.S. jobs report disclosed a mere 22,000 job additions for August, significantly less than the 75,000 forecast, which amplifies the likelihood of a Federal Reserve rate cut.
- Meanwhile, Bitcoin’s price hovers beneath $112K, indicating a bearish trend outlook.
- Despite expected rate cuts from the Fed, the decline in Treasury yields seems constrained.
Bitcoin stays below $112K.
In recent news, bad economic data has exacerbated concerns. The disappointing jobs report failed to stimulate bitcoin’s price, which continues to languish below $112,000. While many believed that easier monetary policy would boost valuations, the reality has shown potential for a further downturn.
The nonfarm payrolls indicated only 22,000 job increases compared to expectations of 75,000. Moreover, prior months’ job creation was downgraded by 21,000, with June experiencing a net loss of 13,000 positions.
This decline extended through several sectors, particularly in manufacturing and construction, while health services experienced growth.
The Kobeissi Letter labeled the jobs report as “absolutely insane,” stressing the alarming nature of these figures. Following this data, the chances of a Fed rate cut at the meeting on September 17 escalated to 100%, with a 50-basis-point reduction now more plausible.
In addition, revisions to previous jobs reports are expected to further support rate cut speculation. Marc Chandler, a market strategist, hinted at major downward revisions impending this week, suggesting a substantial loss of job growth.
Bitcoin’s price recently peaked at over $113,000 during the Fed speculation but rapidly retreated back, creating a worrying double-top pattern reaffirming a bearish outlook. Currently, key support lies around $101,700, linked to the 200-day SMA.
Analysts at ING remarked, “This time around, granted, worries on the economy are more intense. But offsetting this are ongoing fiscal concerns and quite a different inflation dynamic.”
Upcoming August CPI data is expected to shed light on inflationary trends, crucial for market movements.
