Bitcoin pulled back on Friday after stronger-than-expected US employment data led traders to raise their expectations for a Federal Reserve rate hike. BTC dropped roughly 2.7% to below $79,300 after touching a four-month high of $82,240 earlier in the session.

Bitcoin Price Today: BTC Slips Below $79,300

Bitcoin climbed to $82,240 during early Friday trading in Europe, gaining approximately 6.8% over 24 hours and reaching its highest level since May. The rally lost momentum, however, after the latest US jobs report showed the labor market remained stronger than economists had anticipated. Bitcoin subsequently fell about 2.7% to below $79,300 as Treasury yields rose and expectations for near-term Federal Reserve easing weakened.

US Jobs Report Beats Expectations in August

According to the US Bureau of Labor Statistics' August jobs report, the US economy added 162,000 jobs in August, far exceeding economists' expectations of around 56,000. The unemployment rate held steady at 4.1%.

Restaurants and bars did the heavy lifting, adding 59,000 jobs. Manufacturing employment also continued to rise, gaining 16,000 positions.

The information sector was the main weak spot, shedding 23,000 jobs. The decline included losses in computing infrastructure, data processing, web hosting, publishing, and broadcasting.

Wage growth remained relatively steady, with average hourly earnings rising 3.1% year over year. Monthly wages increased 0.3%.

The stronger labor-market figures add to the hawkish backdrop created by Federal Reserve Governor Christopher Waller's comments on Thursday. Waller said he would support keeping rates steady at the September meeting if incoming inflation data continued to cool.

Markets Reprice Fed Rate Hike Bets

Markets reacted quickly to the report, with traders increasing expectations for a September rate hike. The stronger employment figures reduced expectations for near-term Fed easing and pushed Treasury yields higher. The 10-year Treasury yield jumped 3.3 basis points to 4.80%, reflecting a firmer interest-rate outlook following the data.

US stock futures also weakened. Dow futures fell 151 points, or 0.3%, while S&P 500 futures declined 0.2%. Nasdaq futures were little changed, rising around 0.1%.

For Bitcoin, the shift in rate expectations created a headwind for the rally that had pushed BTC to its highest level in four months. Bitcoin has historically traded in line with other risk assets such as technology stocks in response to shifts in the rate outlook, with higher yields and tighter monetary policy generally weighing on demand for assets that offer no yield. Fed Chair Kevin Warsh had already put a September rate hike on the table with his hawkish Jackson Hole speech a week earlier, and the stronger jobs report reinforced expectations that the Fed may keep monetary policy tighter for longer.

Waller's Dovish Signal Meets Strong Jobs Report

Federal Reserve Governor Christopher Waller's comments on Thursday had eased concerns about another Fed rate hike, but Friday's jobs report delivered a stronger signal from the labor market. On September 3, Waller said he would support holding the Fed's policy rate steady at the September meeting if incoming inflation data continued to cool.

The total crypto market capitalization rose more than 3.7% to $2.814 trillion. US-listed spot Bitcoin ETFs recorded roughly $730 million in net inflows on September 3, their strongest single-day haul since January. Those inflows suggest institutional demand remained firm even as macro data turned less favorable, and upcoming ETF flow data and the next inflation prints will offer further indication of whether that appetite persists into the Fed's September decision.

Why This Matters for Bitcoin Price

The stronger-than-expected jobs report complicates the dovish outlook that helped drive Bitcoin's price higher on Thursday. It also reinforces the hawkish Fed policy outlook signaled by Fed Chair Kevin Warsh's speech at the Jackson Hole symposium a week earlier. Markets are now pricing in higher odds of a September rate hike, and risk assets, including Bitcoin, are reacting negatively in real time.

Source: DailyCoin