Bitcoin Surges to $86,885, but Gains Fizzle After Soft Jobs Data

Bitcoin surged past $86,885 ahead of the highly anticipated U.S. nonfarm payrolls data, but its gains were short-lived. The cryptocurrency shed around $2,000 after the release of the soft jobs data, which fueled expectations of looser policy and renewed risk-on in the crypto market.

The jobs data showed that nonfarm payrolls increased by 90,000 in September, down from 162,000 in August, while the unemployment rate remained unchanged at 4.1%. The U.S. 10-year Treasury yield reached a multi-decade high of 5.34%, putting pressure on risk assets.

Despite the stronger dollar, Bitcoin continued to advance, with some analysts attributing the rally to renewed institutional demand and shifting expectations for U.S. interest rates. The market's focus shifted to the Employment Situation release, with the bond market's view of the Federal Reserve set to change after the print.

Bitcoin futures ETFs drew $3.1 billion in inflows over nine consecutive sessions, but later recorded about $148.7 million in net outflows on Wednesday. The trader community is now watching the 10-year real yield, with Oliver Carding stating that a sustained move above 3% would make a retest of $80,000 to $82,000 more likely than a run at $90,000.