Bitcoin (BTC) has struggled to gain traction below $112,000, despite Friday’s U.S. jobs report showing only 22,000 new positions in August — far below expectations and boosting bets on a Federal Reserve rate cut.

Jobs Report Shocks Markets

The nonfarm payrolls report missed forecasts by a wide margin, with analysts having expected 75,000 new jobs. Combined job creation for June and July was revised downward by 21,000, with June now showing a net loss of 13,000 positions.

Nine sectors, including manufacturing, construction, wholesale trade, and professional services, saw losses, while health services and leisure & hospitality remained bright spots.

Market observers, including The Kobeissi Letter, called the report “absolutely insane,” describing the downward revisions as indicative of a labor market slipping toward recession territory.

Following the data, the probability of a September Fed rate cut surged to 100%, while a 50-basis-point cut now carries 12% odds. Bets on further cuts in November and December also rose, sending Treasury yields lower. Upcoming BLS benchmark revisions — expected to further trim historical job growth by 500,000 to 1 million positions — may fuel additional market speculation, according to Marc Chandler, Managing Director at Bannockburn Global Forex.

BTC Technical Outlook

Bitcoin briefly rallied above $113,300 amid hopes for easier monetary policy, but the bounce quickly faded below $111,982, reinforcing the late August double-top breakdown. Analysts note that failing to retake this neckline validates a bearish setup, with the 200-day simple moving average at $101,700 serving as the first major support.

The double-top pattern — formed when a price peaks, retraces, and fails to surpass the previous high — signals a potential downtrend following an uptrend. BTC’s current pattern mirrors February’s double top, which preceded a multi-week sell-off to around $75,000.

Treasury Yields and Volatility

Volatility in Treasury yields could intensify around the upcoming rate cuts. Historically, yields have sometimes reversed initial declines, as seen in late 2024 when the 10-year yield rose from 3.6% in mid-September to 4.8% by mid-January despite Fed easing. Analysts at ING caution that, while today’s labor market is weaker, sticky inflation and ongoing fiscal spending could push yields higher even after a rate cut.

Inflation Data Ahead

Investors will closely watch August CPI data next week. Core CPI is expected to rise 0.3% month-over-month, keeping annual growth at 3.1%, while headline CPI is projected at 2.9% year-over-year. Persistent inflation could complicate the Fed’s policy path and add further volatility to BTC.