Bitcoin slipped below $80,000 after a strong US jobs report pushed the odds of a Federal Reserve rate hike this month to about 60%. Treasury yields climbed in response, yet spot Bitcoin ETFs kept pulling in fresh money, and analysts now say this week's inflation data may decide the coin's next move.
Bitcoin dropped below $80,000 after a strong US jobs report raised the chances of another interest rate hike. Markets now put the odds of a Fed rate hike on September 16 at about 60%.
Strong Jobs Data Puts Bitcoin to the Test
According to the Bitfinex Alpha report, the US added 162,000 jobs in August, while unemployment stayed at 4.1%. The data suggests the labor market remains strong, giving the Fed less reason to rush into cutting rates.
The strong jobs report pushed two-year US Treasury yields above 4.34% as markets adjusted their interest rate hike expectations for the Fed. Higher rates can pressure Bitcoin because safer assets such as government bonds become more attractive.
Even so, Bitcoin held up for a while despite the pressure. It reached $82,400 on September 3 before pulling back, and has since traded between roughly $77,200 and $82,100.
ETF Demand and Inflation Could Set the Next Move
Bitcoin remains about 42% above its July low. US spot Bitcoin ETFs have also continued to attract demand, recording nearly $1 billion in net inflows last week.
Analysts at Bitfinex said this week's inflation report will be an important test for Bitcoin. They are watching whether ETF demand can remain strong even while short-term interest rates stay high.
If ETF buying continues under those conditions, Bitfinex believes high rates may no longer be the main factor limiting Bitcoin's recovery. A sustained flow of money into the ETFs could support Bitcoin if other market conditions remain favorable.
Source: CryptoPotato
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