Bitcoin fell below $77,000 as softer US labor-market data failed to weaken expectations for another Federal Reserve interest-rate increase.
Data from CryptoSlate showed Bitcoin trading at about $76,985 at press time after July job openings held at 7.3 million and hiring remained subdued. The report arrived as markets faced $90 oil, rising Treasury yields and a Federal Reserve that has shifted sharply from discussing rate cuts to considering another hike.
CME FedWatch data put the probability of a September rate increase at 66%, up from roughly 60% after Fed Chair Kevin Warsh’s Aug. 28 speech at Jackson Hole.
JOLTS data shows a cooling but resilient labor market
The latest Job Openings and Labor Turnover Survey did not make markets more hawkish. Instead, it failed to reverse an inflation-driven repricing that had already been reinforced by higher energy prices and Treasury yields.
The Bureau of Labor Statistics reported 5.1 million hires and 3.1 million quits in July, with both figures little changed from the previous month. June job openings were revised down by 177,000 to 7.2 million, while earlier estimates for hires and quits were also lowered.
The softer turnover data arrived less than three weeks before the Fed’s Sept. 15-16 meeting, giving policymakers further evidence that the labor market is cooling without showing the kind of contraction that would settle the policy debate.
Warsh drew that distinction at Jackson Hole. He said employment remained consistent with full employment and argued that unusually low turnover partly reflected the wave of worker and employer rematching that followed the pandemic. His main concern remained inflation.
$90 oil keeps September rate-hike expectations alive
Tuesday’s data strengthened the inflation side of the policy debate. The ISM manufacturing index eased to 54.6 in August from 55.6, while new orders fell to 53.7 from 56.7 and employment declined to 51.2 from 52.8.
Prices, however, barely changed. The ISM Prices Index held at 71.1 for a second consecutive month, with respondents citing fuel and oil-based products among the commodities becoming more expensive.
Crude oil then added to the pressure. West Texas Intermediate surged 5.2% to settle at $90.22, while Brent rose 4.6% to $94.65 as the Iran crisis continued to unsettle energy markets.
Treasury yields moved higher alongside oil. The two-year yield rose to 4.39% from 4.34%, while the benchmark 10-year yield climbed to 4.79% from 4.75%.
The combination helps explain why weaker labor-market turnover failed to reduce expectations for a September rate hike. The Fed entered 2026 expecting several rate cuts, but markets are now assigning a better-than-even probability to another increase.
That reversal leaves Bitcoin facing a considerably less favorable backdrop than investors anticipated earlier in the year. Higher Treasury yields increase the return available on dollar assets and raise the hurdle for holding assets without contractual yield. A stronger dollar can also tighten financial conditions across speculative markets.
Bitcoin ETF outflows add pressure to the crypto market
The latest exchange-traded fund flows suggest that some of this pressure is reaching crypto portfolios.
US spot Bitcoin ETFs recorded $236.46 million in net outflows on Sept. 1, reversing $216.7 million in inflows on Aug. 31. The one-day swing removed a source of institutional support just as Bitcoin slipped back below $77,000.
The reversal followed a volatile period for the cryptocurrency. Bitcoin traded above $81,000 before Warsh’s Jackson Hole remarks pushed rate expectations higher and sent the price below $77,000. Its subsequent rebound has struggled to regain momentum as the September policy outlook hardened.
Oil creates a dilemma for the Federal Reserve
The crude rally complicates the outlook because the same shock that strengthens the case for higher interest rates can also weaken the economy.
James E. Thorne, chief market strategist at Wellington Altus, argued that raising rates in response to an externally driven energy shock could compound the economic damage.
Higher crude prices increase transport and production costs, reduce household purchasing power and squeeze corporate margins. Consumers spending more on fuel have less money available for other purchases, while companies facing higher input costs may respond by reducing investment or hiring.
The Fed can weaken domestic demand through higher borrowing costs, Thorne said, but it cannot increase oil supply or resolve the geopolitical conditions pushing crude prices higher.
That distinction could become more important if the labor market deteriorates further. July JOLTS has already shown weaker turnover, while the latest ISM employment reading cooled. Neither has yet produced the kind of break that would clearly override Warsh’s inflation concerns.
Upcoming US data could reshape Bitcoin’s rate outlook
The next employment report could change that balance. August payroll data is due Sept. 4, followed by producer prices on Sept. 10 and consumer prices on Sept. 11. The Federal Reserve is scheduled to announce its decision on Sept. 16.
A materially weak payroll report would challenge the view that employment remains consistent with full employment. If oil prices also retreat and subsequent inflation data soften, markets would have a clearer reason to unwind September rate-hike expectations and push Treasury yields lower.
Weak employment alongside crude prices near current levels would create a more difficult policy problem. Labor conditions would be deteriorating while an external supply shock kept inflation pressure elevated.
Firm hiring combined with persistent price pressure would reinforce the current setup and could push short-term yields higher again.
Bitcoin enters that sequence near the level reached during the initial post-Jackson Hole selloff, and without the ETF support it carried into the week.
