The cryptocurrency market and the precious metals market experienced a sharp decline today within minutes of the release of U.S. labor market data. The August figures came in nearly three times higher than the analysts' consensus forecast, instantly shifting the balance of power ahead of the Federal Reserve's September meeting.
Employment Report: A Surprise That Broke the Rate-Cut Scenario
According to the latest data, the number of new nonfarm payroll jobs in the U.S. totaled 162,000, while the market had expected only 56,000. This is not just an overshoot—it is a trend reversal. Revisions to previous months' data were also significant: the July figure was revised from a decline of 23,000 to an increase of 21,000, and June was revised upward from 20,000 to 31,000. As a result, the average three-month gain jumped to 71,000 versus 38,000 previously, completely erasing concerns about a sharp economic slowdown.
Particularly telling is that growth was driven by the leisure and hospitality sectors (+62,000), as well as government education (+42,000). The unemployment rate remained at 4.1%, and average hourly earnings rose 0.3% month-over-month to $37.75, corresponding to an annual pace of 3.1%—above the 3.0% forecast.
Instant Reaction: Bitcoin Crashed $80,000 in a Single Candle
The market did not keep anyone waiting. Bitcoin, which was trading near $81,340 before the report's release, plunged to $79,661 in a single five-minute candle, losing 1.80%. Gold, which many considered a "safe haven," also failed to hold: the metal's price fell from $4,473 to $4,376 per ounce, corresponding to a drop of 1.75%.
The volatility triggered a wave of liquidations. In just one hour, $202 million in long positions were liquidated, and the daily liquidation total reached $768.54 million. This is a classic scenario where an overheated market, banking on loose monetary policy, takes a hit in its most vulnerable spots.
Who Sets the Tone Now: Waller vs. Warsh
As recently as late August, the probability of a Fed rate hike was estimated at around 66%. However, this week Governor Christopher Waller hinted at the possibility of holding rates steady, which supported gains in both Bitcoin and gold. Now, the employment data gives Chair Kevin Warsh solid arguments for tightening policy—the labor market remains tight, and wage pressure is not easing.
The key moment will be the release of inflation data on September 11—just five days before the Fed meeting. If inflation comes in below expectations, the market could reassess Friday's moves and return to risk assets. But for now, traders should prepare for heightened volatility.
My take: The market is once again showing just how sensitive it is to macroeconomic data. The current decline is not a trend reversal but a correction of expectations. Bitcoin and gold remain in a long-term upward channel, but in the short term, without support from monetary policy, they will find it difficult to recover lost ground. Keep an eye on the inflation report—it will determine the direction of movement for the coming weeks.