Bitcoin approached $87,000 on Monday before reversing, as a weak U.S. jobs report lowered expectations for another near-term Federal Reserve rate increase but failed to produce a sustained crypto breakout.
Bitcoin reached roughly $86,950 before falling back below $86,000 in early trading. Barron’s later put the cryptocurrency near $86,190.
The retreat leaves Bitcoin facing resistance around $87,000 while traders weigh slower U.S. hiring against high Treasury yields and inflation that remains above the Federal Reserve’s target.
Weak jobs report changes the Fed rate debate
The U.S. economy added only 29,000 jobs in September, the Bureau of Labor Statistics reported on October 2. Unemployment rose to 4.2% from 4.1% in August, while average hourly earnings increased 3.0% over the previous 12 months.
The report also contained weaker revisions. July payrolls were cut from a gain of 21,000 to a loss of 10,000. August was revised from 162,000 new jobs to 133,000. The two revisions removed a combined 60,000 jobs from earlier estimates.
Those figures reduced pressure on the Fed to raise rates again in October.
The central bank raised the federal funds target range by 25 basis points to 3.75% to 4.00% on September 16, citing inflation that remained elevated.
Bond yields initially moved lower after Friday’s jobs report. The 10-year Treasury yield fell to 5.17% from 5.24% a day earlier, according to the Associated Press.
Lower yields can improve conditions for Bitcoin and other risk assets by reducing returns available on government debt. Bitcoin still failed to keep Monday’s advance.
Sellers defend the $87,000 Bitcoin price area
Bitcoin’s latest move carried it above $86,000 and briefly to about $86,950 before sellers pushed the price lower.
CoinDesk reported that the advance was the second rally in roughly a week to stall below the late-September high near $87,400.
That puts the $87,000 to $87,400 zone at the center of the short-term price structure. A sustained move through it would take Bitcoin beyond the level that has stopped its recent advances. Failure to break it would keep the cryptocurrency within its existing range.
The jobs report gave buyers a more favorable interest-rate backdrop, but the price response suggests traders are still cautious while long-term borrowing costs remain elevated.
October CPI could decide the next move
The next major U.S. economic release is September inflation data. The Bureau of Labor Statistics will publish the September consumer price index on October 14. The report comes ahead of the Fed’s October 27-28 policy meeting.
A cooler CPI reading would strengthen the case for keeping rates unchanged after September’s increase. A stronger result could put renewed upward pressure on Treasury yields and revive expectations for further tightening.
For Bitcoin, the immediate question is whether softer labor data can translate into enough demand to break the $87,000 resistance area.
Until that happens, the latest rally remains another unsuccessful test of the upper end of Bitcoin’s recent range.
This article is for informational purposes only and does not constitute investment advice. Crypto assets are volatile. Readers should conduct their own research before making financial decisions.
