Bitcoin erased gains from Waller's remarks after non-agricultural data pushed Fed interest rate hik

Non-agricultural data reshapes expectations of interest rate hikes, Bitcoin retracts Thursday's gains

On Friday, with the release of the U.S. employment report, market expectations for the Federal Reserve to raise interest rates again this month warmed up again. Bitcoin gave up in just five minutes the core of Thursday's gains sparked by comments by Federal Reserve official Waller.

Before the August non-farm payrolls data was released, Bitcoin was trading at approximately US$81,340; within a five-minute K-line, the price plummeted to US$79,661, a drop of approximately 1.8%. This volatility caused Bitcoin to quickly fall below the $80,000 mark, and its retreat was as fast as the previous day's rebound. As of Friday's latest moment, Bitcoin remained near $79,700, and the market returned to below the psychological barrier repaired by Thursday's rally.

This reversal is significant because the catalyst driving the decline is diametrically opposed to the factors that drove BTC to soar on September 3. Previous analysis pointed out that Federal Reserve Governor Christopher Waller sent a dovish signal to lower the probability of a rate hike in September to nearly 50 - 50, thus helping Bitcoin break through the US$80,000 mark. A just-released labor market report stresses this trading logic from another direction.

New non-agricultural jobs were 162,000

Data from the U.S. Bureau of Labor Statistics showed that non-farm payrolls increased by 162,000 in August, and the unemployment rate remained unchanged at 4.1%. Although the overall data was slightly stronger than market expectations, revisions further enhanced the strength of the data. Employment growth in June was revised upward to 31,000 from the previous 20,000, and employment growth in July was revised to an increase of 21,000 from a previously reported decrease of 23,000. The two-month data combined revised upward by 55,000 jobs.

Average hourly wages rose 0.3% month-on-month to US$37.75 in August, up 3.1% year-on-year. The importance of salary data is different from that of total non-agricultural employment. Strong employment reflects economic resilience, while wage growth more directly points to whether domestic price pressures persist, which in turn affects the Fed's comfort judgment on inflation.

The probability of raising interest rates in September will return to more than 50%

Interest rate pricing immediately had an impact on the trend of Bitcoin. A snapshot of the Chicago Mercantile Exchange's FedWatch tool cited by Briefing.com showed that shortly after the data was released, the probability of a 25 basis point rate hike at the September 16 meeting rose to 58.2%, up from 49.4% the day before. This re-pricing does not stop there. Late Friday, short-term interest rate futures implied a September rate rise of about 65%, compared with about 55% before the jobs report. Although the exact probability depends on the timestamp, the direction is clear: the market shifted back from Thursday's near-balance situation to interest rate hikes after the release of non-farm data. This mirrors the market's reaction after Waller said it might support keeping interest rates unchanged if inflation continued to moderate.

Bitcoin's $80,000 breakthrough has been reversed and not yet established

Friday's sell-off does not mean that the dust has settled on the September Fed's decision. A closer look at the details of the labor force report shows that its performance is not generally strong. The catering service industry added 59,000 jobs, and the local government education department added 42,000 jobs, which means that these two areas contributed more than 100,000 of the total increase of 162,000. At the same time, employment in the information industry fell by 23,000.

The next major test will come on September 11, when the August consumer price index (CPI) will be released, just five days before the Federal Reserve's decision. For Bitcoin,$80,000 is no longer just an integer mark, but has deeper market significance. Thursday showed how quickly BTC can break through that level when interest rate hikes are expected to fall; Friday showed how quickly this breakthrough can disappear when expectations are rebuilt. Not only was the rally triggered by Waller weakened, but the interest rate logic behind it was also completely reversed in a data report.