Bitcoin Slips Below $77,000 as Weaker Labor Data Fails to Shift Hike Expectations

Bitcoin's price fell below $77,000 as the latest US labor data failed to change expectations for another Federal Reserve rate increase. The largest cryptocurrency traded around $76,985 at press time after July job openings held steady at 7.3 million and hiring remained subdued.

Data from CryptoSlate shows that the market was already facing higher oil prices, rising Treasury yields, and a Fed that has shifted from discussing rate cuts to considering another hike. The probability of a September rate increase is now at 66%, up from about 60% following Fed Chair Kevin Warsh's Aug. 28 Jackson Hole speech.

The softer labor data did not make markets more hawkish, instead failing to overturn an inflation-driven repricing already reinforced by higher energy prices and Treasury yields. The Bureau of Labor Statistics reported 5.1 million hires and 3.1 million quits in July, with both measures little changed from the previous month.

The latest data release landed just three weeks before the Fed's Sept. 15-16 meeting, giving policymakers further evidence that the labor market is cooling without showing the type of contraction that would settle the policy debate. Warsh had already drawn this distinction at Jackson Hole, saying employment remains consistent with full employment and arguing that unusually low turnover partly reflects the wave of worker and employer rematching that followed the pandemic.

He emphasized his concern about inflation, which was strengthened elsewhere in Tuesday's data. The ISM manufacturing index eased to 54.6 in August from 55.6, while new orders fell to 53.7 from 56.7 and employment declined to 51.2 from 52.8. However, prices barely moved.

ISM's Prices Index held at 71.1 for a second month, with respondents citing fuel and oil-based products among commodities becoming more expensive. Crude then amplified the pressure, surging 5.2% to settle at $90.22, while Brent gained 4.6% to $94.65 as the Iran crisis continued to unsettle energy markets.

Treasury yields moved higher alongside oil, with the two-year yield rising to 4.39% from 4.34%, and the benchmark 10-year climbing to 4.79% from 4.75%. This combination helps explain why weaker labor turnover failed to knock down September hike expectations.

The Fed entered 2026 expecting several rate cuts, but markets are now assigning a better-than-even probability to another increase. That reversal leaves Bitcoin facing a considerably less forgiving backdrop than investors anticipated earlier in the year.

Higher Treasury yields increase the return available on dollar assets and raise the hurdle for holding assets without contractual yield. A stronger dollar can also tighten financial conditions across speculative markets.