Bitcoin prices briefly fell below $79,000, and jobs report weakened Fed interest rate cuts expectati

Non-farm payrolls data was strong in August, with Bitcoin briefly falling below US$79,000.

New jobs in the United States reached 162,000 in August, and the unemployment rate stabilized at 4.1%. Affected by this, the probability of the Federal Reserve raising interest rates to 375 - 400 basis points has risen to about 60%. At the same time, the price of Bitcoin fell below $79,000, and approximately $758.15 million in leveraged positions were liquidated within 24 hours. However, on-chain data shows that despite market volatility, large holders ("whales") have not chosen to sell.

Details of the Employment Report: Services and government education jobs contribute significantly

The August Employment Report released on Friday showed that the U.S. economy added 162,000 jobs that month, which is more than five times the average of approximately 31,000 jobs per month in the past twelve months. The unemployment rate remained at 4.1%, and the average hourly wage increased 0.3% month-on-month to US$37.75, keeping the annual salary growth rate at 3.1%. A revision to June and July data added an additional 55,000 jobs, according to the U.S. Bureau of Labor Statistics.

In terms of specific industries, the catering service industry added 59,000 jobs, almost five times the sector's average over the past 12 months. Local government education departments added 44,000 new jobs, largely offsetting a weak performance in July. Manufacturing has continued its slow recovery since its trough in December 2025, adding 16,000 jobs and is now 58,000 jobs above its low point, driven mainly by machinery and metalware manufacturers.

In contrast, the information industry became the only area with missing bright spots, losing 23,000 jobs and shrinking computing infrastructure, publishing and broadcasting industries. This is in line with the slowdown in technology industry recruitment that has been evident in the data since the beginning of 2026. Outside of this area, the overall employment situation is stronger than the Fed had hoped to see before its meeting two weeks ago, when markets heavily priced the possibility of further policy easing.

Changes in interest rate expectations: CPI data is about to be announced

Given the current Fed's target interest rate range of 350 - 375 basis points, the futures market now gives about 60% probability that interest rates will rise to the 375 - 400 basis points range at the next meeting, and about 40% probability that interest rates will remain the status quo. This is a shift from the division that leaned towards the other side a week ago.

The next key test is coming soon. The August Consumer Price Index (CPI) will be released on September 11. Kalshi predicts that the market prices this result closely: there is about 72% probability that the overall monthly CPI will be above 0.1%, but there is only about 34% probability that it will exceed 0.4%, which means that the implicit consensus is concentrated on a monthly increase of around 0.2%-0.3%. This is a stronger number than the Fed needs to justify a planned rate cut, and is in line with concerns about the proximity of stagflation that have emerged in interest rate market commentary since the spring, namely that flexible labor markets coexist with sticky prices, limiting the Fed's room for maneuver, rather than as the soft-landing narrative suggests.

If the CPI data is at or above that range, the current probability of interest rates close to 60/40 may further reverse in the direction of interest rate cuts, even if the meeting has not yet taken place.

US$758 million liquidation: Long and short sides are evenly matched

This repricing triggered one of the largest liquidation events of the past month. According to CoinGlass data, within 24 hours, a total of approximately US$758.15 million in leveraged positions on major exchanges were forcibly closed, of which US$294.3 million was cleared for long positions and US$463.84 million for short positions. Nearly 61% of the total came from short positions, a more indicative number: a significant number of traders were betting on a deeper decline in the market, but when Bitcoin found a buyer around $79,000 and rebounded, those short positions were forced.

Zcash's performance is particularly prominent relative to its market value. Although its market value is much lower than that of XRP or Solana, nearly US$39 million of positions were still liquidated, indicating that the token has concentrated leverage positioning rather than extensive market participation. The liquidation of XRP was accompanied by positive net flows for the day, further indicating that short positions absorbed most of the losses.

On-chain data reveals: Whales are still holding positions and waiting

Away from the lever-driven noise, on-chain indicators tracked by CryptoQuant paint a calmer picture of large holders. The bitcoin exchange whale ratio, a measure of large wallets as a proportion of total exchange inflows, fell nearly 12%, to 0.39, near its lowest level during the year, indicating that whales did not transfer large amounts of money to exchanges for selling. An expenditure-to-output profit ratio (SOPR) of 1.00 means that the movement of coins on the chain is roughly at the break-even point rather than a significant profit. Unrealized net income and loss (NUPL) remained at a modest 0.31, well below the fanatical readings typically seen at the top of the cycle.

analyst Pelinay pointed out: "Falling selling pressure, still-moderate NUPL and falling whale ratios all support BTC prices." Taken together, this combination is interpreted as a positive factor for prices rather than a warning signal. This is a useful check and balance for clearing headlines: the short-term leverage side of the market suffered sharp shocks on Friday, but the holders with the largest balance were not the main force of the sell-off.

Positioning in the context of larger cycles

Friday's decline followed a strong move in August. According to Fidelity data, Bitcoin, Ethereum and various altcoins recorded their largest monthly gains in August since the end of 2025. Some investors are watching whether the bear market phase of the current cycle, if it does exist, will bottom out around November 2026, a date derived from the four-year Bitcoin cycle theory that links price troughs to a roughly four-year halving schedule.

Fidelity's report cautiously added that recent gains do not guarantee that the bear market is over, and that is a reasonable way to look at Friday's market: a single jobs report and a $758 million liquidation purge are just data points and do not confirm trends in any direction. The more immediate catalyst is the September 11 CPI data, followed by the Federal Reserve's next decision. Before then, the market needs to reconcile three inputs: a labor report that supports a reduction in interest rate cuts, on-chain data that shows whale holdings rather than distribution, and the cyclical framework that some traders use to time bottoms, whether they arrive on time or not. These three factors are not necessarily consistent with each other, which is one reason why Friday's price action was so rapid in both directions.