The U.S. jobs report revealed only 22,000 job additions in August, far below expectations, increasing the likelihood of a Fed rate cut. Still, BTC remains below $112K.
What to know:
- The U.S. jobs report revealed only 22,000 job additions in August, far below expectations, increasing the likelihood of a Fed rate cut.
- Still, BTC's price remains below $112K, suggesting a bearish technical outlook.
- Despite impending Fed rate cuts, the downside in Treasury yields appears limited.
The leading cryptocurrency by market value remains heavy below $112,000, instead of rallying on the prospect of easier monetary policy as many had anticipated. The inability to find upside suggests potential for a deeper sell-off ahead.
NFP shock
Job seekers had a tough time in August as the nonfarm payrolls revealed just 22,000 job additions, significantly less than the Dow Jones' projection of 75,000. The report also revised lower the combined job creation over June and July by 21,000. Notably, the revised June figure showed a net loss of 13,000.
Nine sectors, including manufacturing, construction, wholesale trade, and professional services, registered job losses, while health services and leisure and hospitality were bright spots.
The Kobeissi Letter called the jobs report "absolutely insane." The newsletter service described the downward revisions in prior months as a sign of a broken system and the labour market entering recession territory.
Following the jobs data, the probability of a Fed rate cut at the Sept. 17 meeting surged to 100%, and the odds of a 50-basis-point cut jumped to 12%. The likelihood of additional rate cuts in November and December also increased, sending Treasury yields lower.
The upcoming revisions to earlier jobs reports are expected to add fuel to the rate cut bets. "The BLS will announce annual benchmark revisions on Tuesday, and they are expected to point to even weaker job growth earlier. Some surveys suggest between 500k and 1 mln jobs could be revised away," Bannockburn Global Forex's Managing Director and Chief Market Strategist, Marc Chandler said in a market update.
BTC's double top is intact; volatility in Treasury yields may rise
Bitcoin briefly rallied on hopes of a Fed rate cut and softer yields, reaching a high of over $113,300. But the bounce quickly faded, with prices slipping back under $111,982 — the double‑top neckline.
Failing to retake that level underscored the late August double top breakdown and validates the bearish setup, keeping downside risks in focus. Prices crossing below the Ichimoku cloud further validates the bearish outlook, as Brent Donnelly, president of Spectra Markets, noted in a market update.
The double top is a bearish reversal chart formation that occurs after an asset has experienced an uptrend. It forms when the price reaches a high point (the first peak), then pulls back to a support level called the neckline. The price then rises again but fails to surpass the first peak, creating a second peak at roughly the same level. The pattern is confirmed when the price breaks below the neckline, signaling that the previous uptrend has lost momentum and a downtrend may follow.
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