Bitcoin is having a tough time shaking off three-week lows, despite potentially positive news from the US labor market. As BTC struggles to rebound strongly, the market sees its price lingering below $116,000. However, recent US job data unveiling a shakey labor market and strong odds of a Federal Reserve rate cut offer a potential lifeline to bitcoin.
The Friday opening at Wall Street saw Bitcoin getting pushed back from the $116,000 mark due to investor anxieties over new US trade tariffs. The new tariffs controversy had previously led Bitcoin to dip as low as $114,116. However, US jobs data brought some positivity to the market as July’s nonfarm payrolls, tallying 73,000, failed to reach the estimated 100,000, signaling a weakened labor market. This development has elevated the likelihood of the Federal Reserve announcing an interest rate cut soon, in sharp contrast to the hawkish tone recently adopted by the Fed Chair, Jerome Powell.
The trading community has also expressed its concerns over inconsistencies in the jobs reports with the optimistic views of the Fed regarding labor market strength. The Kobeissi Letter, a popular trading resource, pointed out two possibilities arising from the data discord: a potential recession within the US labor market or significant errors within the data. Recent downward revisions for May and June’s labor data were viewed as “massive”, depicting a rising unemployment rate and a drop of 258,000 jobs over two months.
The anticipated squeeze in BTC price action has the market on edge. Large blocks of short liquidations close to $120,000 — a level many believe is overdue for a visit, are predicted. Crypto investor and entrepreneur, Ted Pillows, foreseeing a revisit to this level, confidently stated, “Just a matter of time before Bitcoin grabs it.” Moreover, indications of successful dip-buying have surfaced, specifically, on major cryptocurrency exchange Bitfinex with traders purchasing below $115,000.