BTC pulled back to ~$79,500 after a blowout Aug. jobs report pushed Fed rate hike odds to 60%. CPI and PPI prints due this week could seal the Sept. 16 decision.
The US economy added 162,000 jobs in August, more than three times the 55,000 economists had forecast.
That single number, released Sept. 5, sent Treasury yields higher, pushed the US dollar up, and knocked Bitcoin (BTC) off a weekly high above $82,000. By Sept. 7, Bitcoin was trading near $79,500.
The stronger-than-expected payroll figure immediately changed how traders were thinking about the Federal Reserve's next meeting. The implied probability of a 25-basis-point rate hike on Sept. 16 climbed to around 60%, according to CME Group's FedWatch tool. The unemployment rate held steady at 4.1%, giving the Fed no reason to ease off.
Rate-sensitive assets tend to struggle when hike expectations rise, and Bitcoin was no exception. The pullback from $82,000 came quickly after the jobs data landed. Despite that, the price held above $79,000 through the weekend, which market observers flagged as notable given the macro backdrop.
Resilience Amid Rising Oil and Yields
LMAX Group market strategist Joel Kruger said Bitcoin had already run hard through August before the jobs report arrived. He told The Block that rising oil prices from the latest escalation between the US and Iran added to the list of headwinds. Kruger said what stood out was that crypto absorbed it all without breaking down technically.
US spot Bitcoin exchange-traded funds (ETFs) recorded $987 million in net inflows last week. That extended their positive flow streak to three consecutive weeks. Analysts at QCP Capital said the daily variation in those flows pointed more to traders adjusting positions ahead of data than to any firm directional conviction. They placed resistance at $80,000 to $82,000 and support at $77,000 to $78,000.
On-chain metrics added a layer of context to the price action. CryptoQuant analyst Axel Adler Jr. reported that the 30-day change in Bitcoin's realized capitalization turned positive on Aug. 24, ending an 87-day negative stretch. By Sept. 6, it had reached 0.88%, with realized cap rising $9.36 billion over the period to $1.068 trillion. A rising realized cap signals that BTC is changing hands at progressively higher prices, which Adler said supports the recovery narrative at current levels.
Related Article: Is the Bitcoin Bull Market Back? Investors Bet on ‘Higher for Longer’ Rates
CPI and PPI Could Decide the Rate Path
US producer price data is due Thursday, Sept. 11. The August consumer price index follows Friday, Sept. 12. Those two prints are the last major inflation readings the Fed will see before its Sept. 16 decision. Capital(dot)com senior financial market analyst Kyle Rodda said headline CPI is expected to hold at 3.4% year-over-year, with core CPI forecast to slip to 2.4%.
Rodda said a softer core reading could give the Fed enough cover to hold rates where they are. A hotter print would put the September hike back in serious play. If that happens, Bitcoin's ability to hold the $77,000 to $78,000 support band identified by QCP Capital will face a real test.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
