Bitcoin (BTC) Price Plunges Briefly Back Below $63,000 as Weak US Jobs Data Triggers Recession Fears
A surprise jump in the US employment rate to 4.3% from 4.1% in July has triggered a sharp drop in risk assets on Friday, with the Bitcoin (BTC) price plunging briefly back below $63,000 as US recession fears rise.
The Bitcoin price briefly as low as the $62,300s before rising back to the $63,000s as US equity markets reeled.
The headline US jobs number showed 114,000 jobs were added to the US economy last month, below the expected 176,000.
BREAKING: US economy adds 114,000 jobs in July, BELOW expectations of 176,000.
The unemployment rate rose to 4.3%, ABOVE expectations of 4.1%.
This marks the highest US unemployment rate since November 2021.
The labor market is beginning to crack.
— The Kobeissi Letter (@KobeissiLetter) August 2, 2024
But all eyes were on the jump in the unemployment rate, given that it triggered recession warnings.
More specifically, as noted by economist Holger Zschaepitz, the Sahm Rule Recession indicator jumped to 0.53 from 0.43, indicating a strong likelihood of an incoming recession.
Sahm Rule Recession Indicator jumped to 0.53 from 0.43 following weak US jobs data, triggering a recession warning. The Sahm rule is a formula used to identify the start of a recession based on the unemployment rate. It triggers a recession warning when the 3mth moving avg of… pic.twitter.com/9b3CHEoIrR
— Holger Zschaepitz (@Schuldensuehner) August 2, 2024
Recession bets sent US government bond yields sharply lower as traders upped bets on a more aggressive Fed rate cutting cycle.
Money markets now imply a more than 70% chance that the Fed cuts interest rates by more 50bps in September, per the CME’s Fed Watch Tool.
Rising Fed rate cut bets are normally touted as a positive catalyst for the Bitcoin price.
But this hasn’t been the
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