Bitcoin BTC falls below $80,000, surging employment data complicates the Fed's prospects

Bitcoin price forecast: Federal Reserve interest rate hike expectations return, BTC stabilizes around US$79,500

At the beginning of this week, affected by an unexpectedly strong non-farm payrolls data, the market reassessed the possibility of the Federal Reserve raising interest rates, causing Bitcoin prices to fall by nearly 3%. This correction moved Bitcoin away from its previous high of above $80,000 and back to the $79,500 range.

The market responded quickly. Non-farm payrolls increased by 162,000 in August, exceeding all analysts 'forecasts in a Bloomberg survey. At the same time, the unemployment rate remained stable at 4.1%. These data pushed bond yields and the U.S. dollar stronger, and the cryptocurrency market immediately felt the pressure.

This unexpected report changed market expectations for the Fed's policy, raising the probability of a rate hike before the September 15-16 Federal Open Market Committee (FOMC) meeting to 59.4%, while the probability of keeping interest rates unchanged dropped to 40.6%, further exacerbating future uncertainty. Macro-level and network-level pressures are exacerbating Bitcoin's volatility, and traders are waiting for a clearer signal.

Why did Bitcoin prices fall today?

Bitcoin's biggest drop during the day reached 1.3%, hitting US$79,660 at one point. Previously, Bitcoin recovered the $80,000 mark on Thursday after Federal Reserve Governor Christopher Waller suggested he might support keeping interest rates unchanged, but the optimism did not last long.

Waller said on September 3 that although inflation has cooled recently, it is still above the Federal Reserve's 2% target. He added that if August data confirmed continued improvement, he would tend to leave rates unchanged; but if the improvement proved to be temporary, rates could be raised. Strong non-farm payrolls data provides more basis for hawkish views.

What does the Fed's interest rate hike expectations mean for cryptocurrencies?

In the past few weeks alone, market expectations have shifted sharply. Current market pricing shows that the probability of a 375-400 basis points rate hike at the September 16 meeting is 59.4%, compared with 49.4% a day ago and 54.4% a month ago.

The probability of raising interest rates over time (375- 400bps) The probability of not raising interest rates is currently 59.4% 40.6% a day ago 49.4% 50.6% a week ago 57.0% 43.0% a month ago 54.4% 45.6% Such large fluctuations are crucial because tighter policies often mean less liquidity and less appetite for risky assets. When the probability of raising interest rates rises rapidly, it is often accompanied by a violent price reaction.

How big is the scale of cryptocurrency clearing this week?

Within 24 hours, the total clearing volume in the cryptocurrency market reached US$399.7 million. Among them, Bitcoin led the gains, with a liquidation amount of US$109.83 million, followed by Ethereum, with a liquidation amount of US$103.06 million. ZEC, XRP and SOL have also experienced large-scale liquidations.

Long positions suffered even greater losses, with a loss of $271.57 million, while short positions lost $128.13 million. During this period, more than 90,500 traders were liquidated. The single largest clearing order was a BTC/USDT position worth US$23.17 million, which occurred on the Binanping Platform.

It was reported that in just 15 minutes after the employment data was released, the market value of the crypto market shrank by more than US$200 million, indicating that digital assets are still highly sensitive to macro unexpected news.

Can Bitcoin ETF still see capital inflows?

Despite the price correction, spot ETFs recorded a net inflow of US$175 million on September 4, the third consecutive day of growth. BlackRock's IBIT leads with $117 million, and Fidelity's FBTC adds $57.22 million.

On the same day, the Ethereum ETF also achieved an inflow of US$26.46 million. ETF demand, which remains stable while price corrections, suggests that long-term buyers are not swayed by short-term fluctuations.

Bitcoin Technical Analysis: What does the chart show?

On the two-hour chart, Bitcoin broke through the downtrend channel and moved sharply higher, before entering consolidation in the range of US$79,500 to US$79,700. The Supertrend indicator has turned green, in line with recent bullish trends.

If the price remains in the range of $79,200 to $79,500, the next target is around $80,500 to $81,200. A stronger breakthrough could open the door to $81,700 to $82,000.

If the price falls below US$79,200 again, it will weaken the current upward trend and may push the price to US$78,500, or even back within the previous channel. The Relative Strength Index (RSI) is at around the neutral level of 51.52, indicating that the market has not stretched too much in either direction.

Does market sentiment match price increases?

According to Sanitation, Bitcoin rose 24% in August, but its social popularity only increased 6%. Throughout the rally, the weighted sentiment remained close to zero and turned negative again on August 26, even though prices were still high at the time.

Analysts pointed to a record short liquidation event of about $2.7 billion, of which about 92% came from short positions, as the main factor driving prices higher. Such a market may be triggered only by forced short covering, without new buyers entering.

Bitcoin price forecast: What will happen next?

The current situation is a tug of war. On the one hand, the Federal Reserve's expectation of raising interest rates is rising and employment data is strong, which puts pressure on risky assets; on the other hand, ETF inflows remain positive, and as long as the US$79,200 support is effective, the chart trend is still in favor of buyers.

The next big test will be the FOMC meeting on September 15-16. Until then, traders are likely to pay close attention to upcoming inflation data, which could influence the Fed's final decision.

Disclaimer : This article is for reference only and does not constitute financial, investment or trading advice. The cryptocurrency market is highly volatile and unpredictable. Be sure to conduct independent research and consult a licensed financial adviser before making an investment decision. Past performance does not represent future results.