Bitcoin Tumbles Below $80K as Strong Jobs Data Boosts Rate Hike Odds
Bitcoin's price slipped below $80,000 as strong US jobs data increased the likelihood of another Federal Reserve rate hike. According to a recent report from Bitfinex Alpha, the US added 162,000 jobs in August, with unemployment remaining at 4.1%. This suggests that the labor market remains strong, giving the Fed less reason to cut rates.
The jobs data pushed two-year US Treasury yields above 4.34%, as markets adjusted their expectations for the Fed. Higher interest rates can make safer assets like government bonds more attractive, which may put pressure on Bitcoin's price. However, Bitcoin held up relatively well despite this pressure, trading between $77,200 and $82,100.
Despite facing potential headwinds from high interest rates, Bitcoin remains about 42% above its July low. US spot Bitcoin ETFs have seen significant demand, with nearly $1 billion in net inflows last week. Analysts at Bitfinex believe that sustained ETF buying could support Bitcoin's price even if short-term interest rates stay high.
However, there is a potential selling hurdle for Bitcoin as more than 71% of its supply is currently in profit. This figure is approaching the historical average of 74.7%, which has been reached during shifts from weaker markets to stronger ones.