Bitcoin News Today: Bitcoin's Fate Hinges on Fed's Employment Tightrope

The recent release of U.S. employment data has intensified expectations for the Federal Reserve to cut interest rates in September. The August jobs report showed only 22,000 new jobs added, far below the market's initial forecasts. This weak performance has shifted the central bank's focus from combating inflation to addressing a cooling labor market. The CME Group’s FedWatch tool now indicates a near-certainty of a 25 basis point rate cut in the September 16–17 meeting, with a growing probability of a 50 basis point cut to a 3.75%–4% range [1]. Analysts such as Jamie Cox and Preston Caldwell have noted that the Fed is likely to respond to the deteriorating job market by adjusting its rate policy to stabilize employment [1].

The Fed’s dual mandate of controlling inflation and promoting maximum employment has placed it in a difficult balancing act. While inflation remains above the 2% target and Trump’s tariffs threaten to push it higher, the recent job market slowdown has made unemployment a more pressing concern. The U.S. now has more unemployed individuals than job openings, a rare situation last seen in October 2021 [4]. This shift in economic dynamics has led to a realignment of expectations for monetary policy. According to Federal Reserve Chair Jerome Powell, the unemployment rate is the most critical indicator to monitor, and a rise to 4.3% in August would signal a concerning trend [4].

Bitcoin markets have responded to the evolving macroeconomic landscape with increased volatility. The cryptocurrency price rebounded above $112,000, fueled by expectations that a Fed rate cut could inject liquidity into risk assets. Analysts pointed out that short positions were liquidated as Bitcoin broke key support levels, with traders anticipating further gains if the Fed acts aggressively to lower rates [2]. The CME FedWatch tool shows that traders are now pricing in a 99.4% probability of a 25 basis point cut in September, a sharp shift from previous forecasts. This has led to speculation that Bitcoin could see a significant price move if the rate-cut narrative gains momentum [2].

Institutional interest in Bitcoin has also surged, with major firms such as MicroStrategy and Metaplanet making large-scale purchases. These moves underscore Bitcoin’s growing role as a hedge against inflation and a store of value in a high-debt environment [3]. Political developments have further fueled optimism, with Donald Trump advocating for Fed easing and promoting initiatives to increase Bitcoin adoption. Meanwhile, regulatory alignment between the SEC and CFTC has provided clarity on certain aspects of crypto trading, contributing to a more favorable environment for institutional participation [3].

However, the path for Bitcoin remains uncertain. Divergent views among analysts highlight the risks and potential for both short-term corrections and long-term bullish trends. Some experts warn of a possible 90% price decline, while others project that Bitcoin could reach $150,000–$200,000 by year-end, contingent on macroeconomic conditions and sustained demand [3]. On-chain data suggests that long-term holders have reduced selling activity, a trend seen before previous bull runs. Technical indicators point to key resistance levels near $113,400, with a clean breakout expected to open the door to higher prices [3].

The broader market is also reacting to the weak job data, with stock futures mixed and gold outperforming Bitcoin as a macro hedge. The S&P 500 and Nasdaq 100 have both reached record highs, driven by expectations of monetary easing. However, concerns about inflation, rising debt, and political interference in economic data have created a complex backdrop for both traditional and crypto markets. As the Fed prepares to act, the coming weeks will be critical in determining whether a rate-cut cycle will provide a sustainable tailwind for Bitcoin and risk assets in general [4].

Source:

[1] Fed Rate Cut Now Appears Certain After Weak Jobs Report (https://www.investopedia.com/job-report-seals-federal-reserve-interest-rate-cut-in-september-11804268)

[2] Bitcoin analysts see a 'massive' move as BTC price regains (https://cointelegraph.com/news/bitcoin-analysts-see-massive-move-btc-price-regains-112k)

[3] Bitcoin Price Forecast Near $112K as BTC-USD Faces Crash (https://www.tradingnews.com/news/bitcoin-price-forecast-near-112k-usd-as-market-braces-for-wild-moves)

[4] America's job market flashes yet another warning sign (https://www.cnn.com/business/live-news/us-jobs-report-august-2025)