NFP Plunges, Bitcoin Begins to Rally
Bitcoin strengthened during Friday's trading (August 7), hovering around the US$65,000–US$65,400 range. BTC is attempting to break out of a consolidation phase after remaining stuck between US$62,000 and US$65,000 for several days.
The primary driver of this movement is US labor data that came in significantly weaker than expected. July Nonfarm Payrolls (NFP) fell by 23,000, contrasting sharply with the forecast of an 80,000 increase. Data from the previous two months was also revised downward by a total of 103,000 jobs, signaling that the labor market is losing momentum.
Wage growth also slowed, while the labor force participation rate dipped to 61.4%. These conditions reduced the probability of a Federal Reserve interest rate hike in September to approximately 40%, down from 55% prior to the NFP release. US bond yields and the dollar weakened, providing a positive boost for risk assets such as stocks and cryptocurrencies.
However, Bitcoin has not yet received as strong a boost as technology stocks. Uncertainty surrounding the Strait of Hormuz remains a risk factor, as there is no final agreement regarding the opening of shipping lanes. Persistently high oil prices could reignite inflation and prompt the Fed to maintain a tight monetary policy for longer.
On the cryptocurrency front, institutional sentiment is improving, yet the market still faces headwinds. The US Senate has postponed discussions on the Clarity Act—a crucial regulation for crypto market structure—until after the recess period. Consequently, investors remain cautious rather than fully aggressive, despite the easing pressure from interest rate concerns.
Newsmaker Analysis: The exceptionally weak NFP data serves as a positive fundamental factor for Bitcoin by mitigating the threat of a Fed rate hike. The US$65,000–US$65,500 zone is now a critical level. If BTC successfully breaks through and holds this level, it could move toward US$67,000. Conversely, if the breakout fails, Bitcoin may consolidate back toward the US$64,000–US$62,000 range. (arl)
Source: Newsmaker.id
