Bitcoin Price Tests $54,000 Level – Here’s How the Latest US Jobs Report Impacted the Market

The Bitcoin (BTC) price tumbled under $54,000, its lowest level since early August, in wake of the release of the August US jobs report, which appears to have exacerbated, not eased, fears that the US is tilting towards a recession and that the Fed may be behind the curve in preventing it.

The latest non-farm payrolls number showed the US economy added 142,000 jobs in August, a tad below the expected number of 160,000.

That’s not a terrible number, but the big negative revisions to the June and July reports seemed to concern the market—86,000 fewer jobs were added in these months than initially thought.

The unemployment rate, meanwhile, eased back to 4.2% from 4.3% in July, but that seemingly failed to ease investor worries.

Last down around 3.7% on the day, per TradingView, the drop in the Bitcoin price reflects bearish trading conditions across risk assets.

The S&P 500 dumped 1.5%, taking its weekly losses to 4%, while the tech-packed Nasdaq 100 index dropped 2.3%.

Meanwhile, the price of WTI futures hit its lowest level since June 2023.

US 10-year yields also hit their lowest since mid-2023 at 3.65%.

These macro moves strongly imply investors are increasingly expecting a US (and global) growth slowdown/recession.

Some analysts believe investors interpret the latest data in an overly bearish manner.

Alianza advisor and former Pimco CEO Mohamed El-Erian commented that the latest numbers are still consistent with his belief that the US economy will avoid a recession.

Especially after the excitement of a month ago, when analysts and economists suddenly jacked up their probability of an economic recession, this morning’s (August) US jobs report comes as a relief… that is unless you were absolutely convinced that the Federal Reserve would cut…

— Mohamed A. El-Erian (@elerianm) September 6, 2024

LondonCryptoClub, meanwhile, referred to the latest sell-down as a “bear trap.”

If Recession is Coming, Where Next for Bitcoin (BTC)?

If the US economy tilts into recession by 2025 and the government/Fed response is massive rate cuts, QE, and big spending, this will be a huge tailwind for Bitcoin.

After all, Bitcoin has been referred to as a great hedge against government currency debasement.

2020/2021 was a perfect example—Bitcoin vaulted to new record highs amid massive fiscal and monetary stimulus, only to pull back harshly as this stimulus was withdrawn (i.e., the Fed started hiking interest rates).

But we are still a long way from that point. As the likelihood of a near-term recession rises as US economic data weaken and markets remain unsure of the government/Fed response, rising uncertainty could hit risk assets across the board, Bitcoin included.

Long-term investors should continue to buy Bitcoin dips in anticipation that the price will break above $100,000 in the coming years.

But the short-term outlook is murkier. Fed rate cuts starting later this month will not likely be a major tailwind for Bitcoin until recession uncertainty clears up.

Politics, meanwhile, remains a wild card. Bettors appear to give the more pro-crypto US Presidential candidate Trump the edge over his Democrat rival Harris.