- Bitcoin rebounded from $114,100 and is moving toward $116,000 after weak U.S. jobs data boosted speculation of a Federal Reserve rate cut.
- Nonfarm payrolls added only 73,000 jobs in July, with significant downward revisions to prior months highlighting labor market weakness.
- Odds of a September rate cut jumped to 82.1% from 39.2%, lifting sentiment across financial markets and supporting BTC recovery.
Bitcoin pared earlier losses on Thursday as it moved closer to reclaiming the $116,000 level. Data from TradingView showed the cryptocurrency bouncing from an intraday low near $114,100, supported by growing speculation of a U.S. Federal Reserve rate cut in September.
The rebound followed the release of disappointing labor market figures. The U.S. Bureau of Labor Statistics reported that nonfarm payrolls increased by only 73,000 in July. This was far below the market expectation of 147,000. Furthermore, June and May job numbers were revised sharply lower to 14,000 and 19,000 from 133,000 and 125,000.
Unemployment Rate and Labor Market Outlook
The unemployment rate held steady at 4.2%, aligning with forecasts. However, the weaker job creation and significant downward revisions pointed to a slowing labor market. Investors interpreted the data as evidence that the Fed may need to act sooner than expected to provide economic support.
According to the CME FedWatch tool, the probability of a September rate cut surged to 82.1% from 39.2% just a day earlier. This shift followed a sharp decline in expectations earlier in the week after hotter-than-expected PCE inflation data. The anticipated cut would mark the first reduction in interest rates this year after five consecutive meetings where the Fed kept rates unchanged.
Impact of Trump’s Tariffs
The possibility of monetary easing comes as the market faces additional pressure from new trade measures. Bitcoin and other cryptocurrencies had fallen to fresh lows this week after President Donald Trump signed an executive order introducing reciprocal tariffs. These tariffs have raised concerns of further inflation and market disruption.
Reacting to the payroll data, Trump continued claiming that the Federal Reserve should reduce rates in a post on Truth Social. He denounced Fed Chairman Jerome Powell as he emphasized that tariffs are contributing to the U.S. Treasury. The remarks exerted political pressure on the Fed, which is weighing the risk of increased inflation, as there has been evidence of decelerating employment growth.
In September, the Fed will have to make a very important choice. Although inflation is an issue, the market is getting weaker in labor, which is intensifying the demand to make a change in policy. The potential of a cut in rates may help sustain wider markets and give Bitcoin, which is already experiencing early signs of recovery with traders pricing in weaker monetary policy.
