Bitcoin dropped below $80,000 on Friday after a blowout August jobs report revived bets that the Federal Reserve will raise interest rates at its September meeting.
The U.S. economy added 162,000 jobs in August, roughly triple the 53,000 economists had forecast, according to the Bureau of Labor Statistics. The unemployment rate held at 4.2% and wage growth came in at 0.4% month-over-month, above the 0.3% consensus. Fed funds futures traders immediately priced in a 58% probability of a 25-basis-point hike at the September 15-16 meeting, up from 49.4% the day before, per CME FedWatch.
Bitcoin had climbed to $82,240 earlier in the session – a four-month high – after Fed Governor Christopher Waller said Thursday he would be “inclined to support” holding rates steady. The payrolls number reversed those gains within minutes. By afternoon trading, BTC was down roughly 3% on the day.
Red September pattern deepens
The pullback extends a tough stretch for Bitcoin. The token has fallen about 6% from its September peak near $82,600 and is now flirting with the $79,000 level. It opened the month near $77,500.
September has historically been the worst month for Bitcoin. The token has closed lower in eight of the last 13 Septembers, a pattern traders call “Red September.” This year’s version has been driven by a hawkish Federal Reserve that keeps signaling it is not done fighting inflation.
The broader crypto market tracked lower. The global market capitalization slipped 1.3% to $2.78 trillion, according to CoinMarketCap. Ethereum dropped to around $2,460 while XRP traded near $1.41. The Fear and Greed Index eased from 74 to 73, still in “Greed” territory but off its recent highs.
The selloff hit leveraged positions hard. Coinglass data showed $287 million in crypto longs liquidated in the 24 hours through Friday afternoon, with Bitcoin accounting for $112 million of that total. Solana and Ethereum liquidations made up another $89 million combined.
Rate hike odds jump in a week
The repricing has been swift. A week ago, CME FedWatch showed a 39.6% probability of a September hike. Now it sits at 58%. The shift followed Federal Reserve Chair Kevin Warsh’s keynote at the Jackson Hole symposium on August 28, where he said the central bank has “work to do” on inflation and that forward guidance had “overstayed its welcome.”
Warsh’s remarks sent September hike odds from around 35% to the mid-50s overnight. Bitcoin briefly fell below $77,000 after the speech before recovering over the following days.
Higher rates make risk-free assets like U.S. Treasuries more attractive. That raises the bar for what Bitcoin needs to return to justify holding it over government bonds. A stronger dollar, which typically accompanies tighter policy, also weighs on dollar-priced assets.
Treasury yields rose across the curve on Friday. The two-year note touched its highest level since January 2025, reflecting expectations that the Fed may need to act sooner than previously thought. The 10-year yield climbed to 4.38%, its highest since mid-July.
“The labor market just told the Fed it doesn’t need to be cautious anymore,” said Sarah Henning, a strategist at StoneX. “If inflation data next week cooperates, a September hike is almost certain.”
What traders are watching
Bitcoin’s immediate support sits around the $77,000-$78,000 range, where buyers stepped in after the Jackson Hole selloff. Below that, the 200-day moving average near $74,000 becomes the line in the sand. A sustained break below that level would mark the deepest pullback since the March correction that sent BTC briefly below $70,000.
On the upside, reclaiming $80,000 would need a catalyst – either softer inflation data or a dovish pivot from Fed officials. The next major economic release is the August CPI report due September 11, just four days before the FOMC decision.
The September 15-16 FOMC meeting looms as the next big catalyst. If the Fed does hike, it would be the first increase since 2023 and would likely pressure risk assets further. If it holds, Bitcoin could rebound quickly as the overhang lifts.
Looking beyond the immediate volatility, the jobs data complicates the narrative for crypto bulls who had been betting on rate cuts as a tailwind. Earlier this summer, markets had priced in three cuts by year-end. Now the conversation has flipped entirely to whether the Fed will tighten at all.
Bitcoin ETF flows have held up despite the macro headwinds. BlackRock’s IBIT saw $89 million in net inflows on Thursday, its fourth straight day of positive flows. But the pace has slowed from the $200 million-plus daily averages seen in late August, suggesting institutional buyers are growing more selective as the rate picture shifts.
Gold, which has rallied alongside Bitcoin on safe-haven demand this year, also pulled back on Friday, dropping 1.2% to $3,240 per ounce. The parallel move underscores how both assets are now trading more like risk assets than hedges when rate expectations shift sharply.
Crypto enters the weekend with its fate tied to macro data. The August producer price index report due September 12 will offer another read on inflation pressures. If it comes in hot, rate hike odds could push above 65% and send Bitcoin toward the $74,000 support level. A soft print, on the other hand, could trigger a relief rally back above $80,000.
The next two weeks will determine whether September’s “Red” label holds or whether Bitcoin can grind higher into the fall. For now, the macro winds are blowing against risk assets.
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