Bitcoin Price Drops Below $54K Amid Jobs Report and Fed Rate Cut Speculation

Bitcoin (BTC) saw significant volatility on Friday, briefly surging to $57,000 before plunging below $54,000 following the release of the U.S. nonfarm payrolls report.

Written by: Arslan Butt • Saturday, September 7, 2024 • 2 min read

• Last updated: Saturday, September 7, 2024

Bitcoin (BTC) saw significant volatility on Friday, briefly surging to $57,000 before plunging below $54,000 following the release of the U.S. nonfarm payrolls report.

This sharp price swing led to over $50 million in liquidations across crypto derivatives markets, primarily targeting leveraged long positions.

By the end of the day, Bitcoin was down nearly 3%, hitting its lowest price since early August. Major altcoins, including Ether (ETH), Solana (SOL), and XRP, also posted losses of 2%-4%.

U.S. Jobs Data and Fed Rate Cut Anticipation

The U.S. added 142,000 jobs in August, slightly below analysts’ expectations, while the unemployment rate fell to 4.2%.

This data has further fueled speculation about the Federal Reserve’s upcoming interest rate decision at its September 18 meeting. Currently, market participants see a 70% chance of a 25 basis-point cut and a 30% probability of a larger 50 bps cut.

Fed Governor Christopher Waller supported lowering interest rates, stating, “The time has come to lower rates,” and indicated he would advocate for “front-loading cuts” if necessary.

However, some analysts argue that a smaller cut might be more favourable for risk assets like Bitcoin, as a larger cut could signal deeper concerns about the economy.

Technical Analysis: Bitcoin’s Key Levels to Watch

Bitcoin is currently testing crucial support levels. The Relative Strength Index (RSI) is hovering around 35, suggesting Bitcoin is in oversold territory and may see a bullish bounce.

However, resistance lies at $55,250, and if Bitcoin fails to break above this level, selling pressure may resume. A drop below $53,350 could push the price down to the next support at $51,720.

RSI: Rebounding from 35, indicating possible upside potential.
Resistance: $55,250 is the immediate level to watch.
Support: Key support sits at $53,350, with further downside possible to $51,720.