U.S. Jobs Surge 147,000, Fed Rate Cut Uncertainty Sends Bitcoin Below $110,000

The U.S. Bureau of Labor Statistics reported a significant increase in non-farm payrolls for June, with 147,000 jobs added, far exceeding the forecast of 110,000. This robust employment data has led to a shift in market expectations regarding the Federal Reserve's monetary policy, particularly the likelihood of a rate cut in July. The unemployment rate also fell to 4.1%, below the expected 4.3%, further bolstering the strong economic outlook.

Federal Reserve Chairman Jerome Powell has indicated that a rate cut in July is still under consideration, but the strong employment data has made the market more cautious. The probability of the Fed holding rates steady in its upcoming July meeting has surged from 75% to 95%, according to the CME FedWatch tool. This shift in expectations has created a headwind for assets that thrive on liquidity and lower borrowing costs, such as Bitcoin and Ethereum.

In response to the jobs report, Bitcoin experienced a modest dip to just under $109,000, after briefly topping $110,000 for the first time in a month. This reversal highlights the sensitivity of cryptocurrency markets to macroeconomic data and the potential for significant price movements in response to changes in monetary policy expectations. The rejection from the $110,500 area now establishes it as a formidable short-term resistance, with traders closely monitoring the 24-hour low of $107,915.10 as the first major support level.

The ripple effects of the macroeconomic news were felt across the altcoin market, though the performance was not uniform. While Bitcoin's immediate trajectory turned bearish, several major altcoins displayed notable strength, suggesting capital rotation and idiosyncratic catalysts are also at play. Ethereum, for example, showed significant gains relative to Bitcoin, with the ETHBTC pair posting a gain of 4.55%. Similarly, Avalanche and Cardano outperformed, with AVAXBTC and ADABTC pairs surging 6.73% and 5.9%, respectively. However, not all altcoins shared this fate, with Solana and Binance Coin showing more muted reactions.

Looking ahead, the focus now shifts from a potential July rate cut to the Fed's September meeting, for which traders still price a 78% chance of a cut, down from 95% before the jobs report. A subtle dovish point within the otherwise hawkish report was the slightly cooler-than-expected wage growth, with average hourly earnings rising 0.2% month-over-month, missing the 0.3% forecast. This could be a silver lining for bulls, as slowing wage inflation is a key metric the Fed watches. However, the headline payroll and unemployment numbers are overwhelmingly dominant in the current narrative.

With U.S. markets closing early on Thursday and remaining shut Friday for the July 4th holiday, traders should be cautious of potentially thin liquidity and heightened volatility. For Bitcoin, the path forward is now contingent on its ability to reclaim the $110,000 level. Failure to do so could confirm a local top and usher in a period of consolidation or correction as the market fully digests the delay in anticipated monetary easing.