Why is Bitcoin down today? All you need to know about U.S Jobs report and more…

• The United States added 142k jobs in August, falling short of expected figures of 160k 
• Bitcoin dropped to a monthly low, but aggressive bets on Fed rate cuts hiked

Bitcoin [BTC], the world’s largest cryptocurrency, dropped to a monthly low of $52.5k on the charts – A trend that mirrored U.S stocks’ decline on Friday. The extended plunge followed a weaker-than-expected August Jobs report released on Friday. 

According to the U.S Bureau of Labor Statistics (BLS

), 142k jobs were created in August. This number was well below analysts’ expectations of 160k. On the contrary, the unemployment rate dropped slightly to 4.2%. 

Impact on BTC and Fed rate cut’s outlook 

The aforementioned U.S Jobs Report is crucial to BTC and the rest of the market. Especially because Fed chair Jerome Powell had initially stated that the pace of interest rate cuts would also depend on the state of labor markets. Needless to say, many in the community had a lot to say about the same. 

Leena ElDeeb, a research analyst at digital asset manager 21Shares, told AMBCrypto that the weak jobs report is a ‘moment of truth’ for risk-on assets like BTC. 

“The recent U.S. labor market results acted as a moment of truth for risk-on assets like Bitcoin, as the labor market is considered the main sector that may influence the Fed’s decision to cut rates this month.”

She added, 

“With a slightly improving unemployment rate, investors traded positively, pricing in a looser monetary policy on September 18.”

For context, a few minutes after the report was released, aggressive bets on a 0.5% Fed rate cut surged above 50% and eclipsed odds of a 0.25% cut. However, after the market digested the data, the odds of a 0.25% rate cut hiked to 70% during early Asia hours on Saturday. 

Bitcoin’s price reaction to U.S Jobs data

After the report was released, BTC surged to $56.9k on the charts. However, this turned out to be a short-term bull trap.

The cryptocurrency soon dropped sharply to $52.5k later – A monthly low.  

Here, it’s worth noting that the extended drop to $52k hit a weekly bullish order block (OB) and support level (marked cyan) that stopped the early August plunge.

Hence, Bitcoin falling to $52k could be a great buying opportunity, especially if the support holds.