After U.S. employment data in August significantly exceeded expectations, markets quickly reduced their expectations for loose policies. Bitcoin fell after reaching a four-month high earlier on Friday, once again dropping below $80,000, and gold and U.S. stocks were also hit by the same impact.
August employment data exceeded expectations
Data from the U.S. Bureau of Labor Statistics shows that in August, there were 162,000 new non-farm jobs created, far exceeding the market's expectation of 53,000. The unemployment rate remained at 4.1%, in line with expectations, and the employment data for June and July were also revised upward.
After the data was released, the interest rate market quickly adjusted its expectations. According to CME FedWatch, traders' bets on a Fed interest rate hike at its meeting on September 15-16 rose to 58%, up from 49.4% the previous day. U.S. Treasury yields moved higher across the board, with the yield for 2-year Treasuries reaching a level not seen since January 2025.
Bitcoin loses some of its daily gains
Before the non-farm payroll data was released, Bitcoin once rose to $82,240, hitting a four-month high. The day before that, Federal Reserve governor Christopher Waller expressed a tendency to support keeping interest rates unchanged, which drove risk assets to strengthen in the short term.
However, strong employment data weakened this expectation. Bitcoin fell by more than 2% within minutes of the data release, dropping to around $79,300 at one point. Higher interest rates typically increase the attractiveness of risk-free assets and lead to a stronger dollar, which tends to suppress dollar-denominated risk assets and gold.
ETF continues to record net inflows
Despite the price decline, the overall sentiment in the crypto market remains optimistic. The Fear & Greed Index for CoinMarketCap reads 75, still within the “greedy” range, but it has cooled down from the “extremely greedy” level of the previous week.
Spot Bitcoin ETF recorded a net inflow of $730.8 million on the same day, continuing the buying momentum brought about by the expectation of a pause in interest rate hikes. Altcoin Season Index reported a preference for Bitcoin over a broader range of altcoins, indicating that the market trend still favors Bitcoin.
On Friday, the main U.S. stock market indices showed mixed performance: the Dow Jones Industrial Average fell by 0.4%, the S&P 500 Index dropped by 0.2%, while the Nasdaq Composite Index rose by 0.1%. Gold prices once plummeted to $4,380 per ounce during the session. The market will now focus on the Federal Reserve's interest rate meeting on September 15-16, as well as the next U.S. employment report to be released on October 2.
