Ahead of the U.S. jobs report, Bitcoin (BTC) and the cryptocurrency market experienced a solid decline. Bitcoin’s price fell to approximately $55,200 in the last 24 hours, marking a month low. Yet, following the release of positive job data, Bitcoin regained its momentum, now aiming for a potential bullish weekend. The addition of 142K jobs in the U.S. has brought hopes for a rate cut, triggering a surge in the crypto market cap.
A Rate Cut Might Revive Crypto Prices
U.S. job growth in August fell short of expectations, with the economy adding 142,000 jobs compared to the anticipated 160,000, though the numbers were an improvement over July’s revised 89,000 jobs.
Despite this, the slight underperformance is unlikely to prompt the Federal Reserve to initiate rate cuts this month, including a potential 50 basis point adjustment. Following the release of the Nonfarm Payrolls report, the unemployment rate ticked down to 4.2%, meeting expectations and a slight decrease from July’s 4.3%.
Also read: Bitcoin Price Analysis: Can Bitcoin Break the $60,000 Barrier Soon?
Bitcoin’s price, which had decreased significantly prior to the report, saw a minor recovery of about 1.7%, reaching $57,000 shortly after the data was released. However, it is still down by 4.5% compared to the previous week.
The August jobs report was particularly important because the Federal Reserve is expected to start lowering interest rates in mid-September. Most people thought the Fed would be cautious and only cut the rate by 25 basis points.
However, weaker job numbers for August might push them to make a larger cut of 50 basis points. Still, the main data, especially after revising the job growth numbers down for June and July, doesn’t really support a big rate cut. If we see a 25-basis rate cut, the crypto market might feel the positive impact, resulting in an immediate surge in the BTC price toward $60K.
Will September Follow a Bearish Trend?
September has often been a tough month for cryptocurrencies, showing negative returns in eight of the last nine years. With the pressure from August and ongoing bearish performance, September 2024 might also lean towards a downward trend.
The crypto community is hoping for a better end to the year despite the slow progress this season. With important economic factors coming into play this September, they’re looking forward to a possible rate cut that could kickstart a bullish trend. A rate cut might break the historically bearish trend in the market this month.
Looking at past trends, Bitcoin’s price has typically doubled from its peak in the previous cycle. Yet, in this cycle, Bitcoin has only slightly passed its last high of $69,000, reaching a new high of $73,750, which is still well below its past explosive highs.
However, Arthur Hayes, BitMEX co-founder, predicts a drop in Bitcoin’s price this weekend, targeting below $50k, and has placed a short bet.
