The release of fresh U.S. labor market data triggered an immediate sell-off in both cryptocurrencies and safe-haven assets. The figures came in nearly three times better than forecasts, dramatically shifting the outlook for the Fed's monetary policy at its upcoming meeting.
Sensational Numbers: Job Growth Blows Past Expectations
According to the Labor Department's report, 162,000 new jobs were created in the U.S. economy in August, while the consensus forecast among analysts had anticipated only 56,000. This is not just an exceedance but a true knockout for the market. The leisure and hospitality sector's contribution is especially impressive, adding 62,000 positions, of which 55,000 came from restaurants and bars. The public education sector also posted a solid gain of 42,000 jobs.
However, an even more significant signal was the large-scale revision of data for previous months. The adjustment of figures for June and July added an additional 55,000 jobs to the statistics. As a result, July's decline of 23,000 turned into growth of 21,000, while June's figure was revised up from 20,000 to 31,000. The three-month moving average jumped from 38,000 to 71,000, completely dismantling the narrative of a sharp cooling in the labor market.
The unemployment rate remained at 4.1%, as expected. Average hourly earnings rose by 0.3% to $37.75, which translates to 3.1% on an annual basis — slightly above the forecasted 3.0%.
Bitcoin and Gold Under Pressure: One Candle Decides It All
The market's reaction was immediate and brutal. Bitcoin, which was trading around $81,340 before the data release, plunged to $79,661 in a single five-minute candle, losing 1.80%. The latest trades were taking place near $79,860. Gold, often considered a "safe haven," could not hold its ground this time: its price fell from $4,473 to $4,376 per ounce, corresponding to a drop of 1.75%.
The wave of liquidations in the derivatives market only intensified the chaos. According to CoinGlass, $202 million in long positions were liquidated within one hour, while the total daily liquidation amount reached an impressive $768.54 million.
A New Reality for the Fed and a Look Ahead
Just a week ago, the market was pricing in roughly a 66% probability of a rate hike. However, after "dovish" hints from Governor Christopher Waller, those odds were cut in half, which had been fueling the rise in Bitcoin and gold. Now the situation has changed. Strong employment data and upward revisions to the statistics give Fed Chair Kevin Warsh substantial arguments for tightening policy. The labor market remains tight, and this is a key factor.
Traders' attention is now focused on inflation data, which will be released on September 11 — just five days before the Fed meeting. If inflation figures come in low, the market may reassess its assessment of Friday's decline.
My take: This report is a sobering signal for everyone who was betting on a swift reversal in monetary policy. The resilience of the labor market is not just statistics but a fundamental factor that will weigh on risky assets. In the short term, Bitcoin is vulnerable, and the key support level will be the psychological mark of $79,000. Until the Fed gives clear signals of easing, volatility will remain high, and I advise investors to exercise caution and avoid increasing leverage ahead of the meeting.