Short-Term Bitcoin Movements After Weak US Jobs Data and Interest Rate Cuts

• US employment fell by 818,000 year over year last March.
• However, the head of the Feds has already confirmed that the interest rate will be reduced in September.
• The impact of short-term interest rate cuts on Bitcoin amid weaker-than-expected data may be difficult, but likely to be as strong as the currency’s rise. of crypto to $ 64K this Saturday to show.

Limited US Employment Information

The likelihood of the US Federal Reserve cutting interest rates in September has increased significantly. However, economists are keeping a close eye on weaker-than-expected job data.

According to the latest report from the US Bureau of Labor Statistics, the nonfarm payrolls job market produced 818,000 fewer jobs annually from March 2023 through the same month of 2024. This is represents a decrease of 0.5% between the two periods. Meanwhile, total private sector employment fell 0.6% to 819,000.

The largest decline came from the professional and business services sector, which experienced negative growth of 1.6% to 358,000. The recreation and hospitality sectors as well as the manufacturing sector ranked second and third among those who lost the most people, with 150,000 and 115,000 job losses, respectively.

Although the numbers are somewhat in line with analysts’ predictions, they have ended expectations of a major recovery in the labor market this year. Because of these events, the Republican side used this opportunity to criticize the inaction of the so-called President Joe Biden. “Bidenomics.”

US Exchange Rate

Ideally, it would be safer for the Fed to maintain its neutral tone on interest rate cuts to prevent the possible consequences of jumping the gun before the official decision of the Federal Open Market Committee (FOMC ). However, its chairman, Jerome Powell, said so clearly “the time has come” for the central bank to lower the numbers in a speech at the Jackson Hole event on Friday.

At this point, analysts are buying a series of interest rate cuts to 3.7% this year, with a reduction of about 4.5% in 2025. Their views are based mainly on the US presidential election in November.

Over time, Democrats have been toying with a possible change in their view of cryptocurrencies and digital assets. However, Republicans, led by presidential candidate Donald Trump and vice-presidential candidate JD Vance, have remained steadfast in their commitment to the suspension. “illegal and un-American crypto operation” of the federal government of the crypto market.

Potential Impacts on Bitcoin and the Crypto Market

Despite public opinion on the 2024 presidential race, short-term interest rates in Bitcoin (BTC) amid weaker-than-expected job data could they are very difficult. However, it is clear that the good news from the Fed contributed in some way to the recovery of the value of the crypto asset to $ 64K this Saturday morning (in UTC terms).

To create a solid short-term forecast for Bitcoin and crypto prices, one must first measure equity market sentiment and the strength of the US dollar. If the main digital asset is able to hold its ground against a weakening dollar and fixed income investments, its story as an inflation hedge could generate a positive response from retail and institutional investors. .

Contrary to this, a negative reaction of the equity markets-if the Fed fails to achieve a soft position in the implementation of the rate adjustment-can lead to a reduction in risk. In this case, it can reduce their appetite for risk and drive them away from risky assets like Bitcoin and crypto. Under such a situation, members of the crypto community should be prepared for a possible breach of BTC’s key support levels.

The flight to safety may not immediately benefit Bitcoin and other digital assets if cautious investors flock to tangible investments such as gold or real estate.