Bitcoin climbed back to $87,000 after U.S. employment data fell short of expectations. Nonfarm payrolls increased by 29,000 in September, while the unemployment rate stood at 4.2%.
The figures, released on Friday, October 2, at 8:30 a.m. ET, weakened expectations for another Fed rate hike in October. Bitcoin extended its earlier gains in the first few minutes after the release.
U.S. job growth reaches roughly one-third of expectations
The U.S. economy added 29,000 nonfarm jobs in September. The figure fell 60,000 short of the 89,000 forecast listed on the economic calendar followed for this report.
Job growth therefore amounted to roughly one-third of expectations. The figures showed that hiring continued, although at a considerably slower pace than anticipated.
The unemployment rate also exceeded the 4.1% forecast, reaching 4.2%. Together with slower hiring, this reinforced the labor market’s importance in monetary policy assessments.
Previous figures also saw a downward revision. According to the Financial Times, August’s payroll gain was revised from the initially reported 162,000 to 133,000.
The report therefore brought more than a disappointing September figure. The August revision also showed that the previous month’s hiring performance was weaker than initially reported.
Bitcoin reaches $87,000 after the release
Bitcoin was trading above $86,000 before the jobs report. At that point, its gain over the previous 24 hours was approximately 2%.
According to the first price update after the release, Bitcoin returned to $87,000 at 8:32 a.m. ET. The rally that began before the report continued immediately afterward.
This distinction matters when assessing the price movement. Bitcoin’s entire daily gain did not occur after the jobs report; the cryptocurrency was already rising ahead of the release.
The $87,000 level reflects the initial reaction to the data. Subsequent buying and selling will determine whether the price can hold that level.
Expectations for an October Fed rate hike weaken
U.S. short-term interest rate futures rose after the weaker-than-expected employment figures. Traders reduced positions anticipating an additional Fed rate hike in October.
For the crypto market, the key connection was the employment outlook’s effect on interest rate expectations. Weaker hiring brings renewed attention to the potential economic consequences of further monetary tightening.
A lower probability of rate hikes could ease pressure on risk assets. Bitcoin’s initial reaction suggests that investors may have interpreted the report along those lines.
However, reduced expectations for a rate hike do not automatically translate into expectations for a rate cut. Markets could also place greater weight on a scenario in which the Fed holds rates steady.
A single employment report does not determine the Fed’s decision. Inflation trends, wage developments and economic activity remain relevant to its policy assessment.
Crypto markets watch for further gains
The initial price movement showed Bitcoin’s continued sensitivity to macroeconomic data. Subsequent trading will reveal how strongly the shift in interest rate expectations translates into demand for crypto assets.
