Jobs Report Wipeout: Bitcoin Slumps on Strong Economic Data

Bitcoin's price plummeted on Friday after the release of the August nonfarm payrolls report, which revealed a significant increase in job creation. The report showed that the U.S. economy added 162,000 jobs in August, far exceeding expectations of around 53,000 to 56,000.

This strong economic data has strengthened the case for a Federal Reserve rate hike at its September 15-16 policy meeting, with rate hike odds surging to 59% immediately after the release. As a result, Treasury yields rose and the U.S. dollar index advanced, leading to a sharp decline in Bitcoin's price.

Bitcoin had been trading above $81,000 before the report but fell to around $79,654 in just one five-minute candle, before partially recovering to around $81,000 by early afternoon. The speed of the initial drop was attributed to leveraged positioning and forced sell orders from approximately $200 million in long cryptocurrency positions being liquidated within one hour of the payroll release.

According to Jasper De Maere, OTC trader at crypto market maker Wintermute, Bitcoin is expected to remain choppy until the rate decision clears, with resistance around $82,000 and support at $75,000 and $72,000. The September 16 FOMC meeting will be shaped by two key data releases: August CPI on September 11, which will provide further insight into inflation trends.