FX.co ★ Bitcoin retreats as jobs data reprices Fed hike odds

BTC/USD plunged after stronger-than-expected US labor data revived investor bets on a September Fed rate hike and abruptly reversed the recent push toward $80,000.

Payrolls rose by 162,000 in August, beating all Bloomberg survey estimates, while the unemployment rate held at 4.1%. Two-year Treasury yields jumped, and the US dollar strengthened. Bitcoin fell alongside equities and bonds, and crypto-linked stocks, including Coinbase, MicroStrategy, and Circle, slid between roughly 1% and 4%.

The reversal hands Bitcoin a fresh macro test around the $80,000 mark, a level it had already struggled to hold despite a 25% gain in August — its best monthly performance since November 2024.

Bitcoin ETF capital flow dynamics

Flows into Bitcoin ETFs underpinned the August rally. The move was largely driven by the so-called debasement trade after Treasury Secretary Scott Bessent's announcement on stepped-up long-term purchases revived bets on dollar weakening and triggered record forced liquidations of leveraged short positions. IG Australia estimates that a sizable portion of the BTC/USD rally was driven by short-squeeze dynamics, raising the question of how much higher Bitcoin can run from current positioning.

Institutional interest was real but mixed. Spot Bitcoin ETFs took in about $3.5 billion in August — the largest monthly inflow since July 2025, per Bloomberg — yet flows were uneven, with two significant outflow days last week. Glassnode shows seven-day ETF inflows during the rally averaged about $290 million per day, a pace below prior major bull runs.

Coinbase premium dynamics

Not all signals are bullish. The seven-day average Coinbase premium, the price gap between the US's largest exchange and international venues, has been negative for more than four months. Compounding structural risk, the Liquid Network suffered a $320 million hack, with roughly 4,000 of 4,200 stored BTC stolen. Paradoxically, past security incidents have sometimes driven ETF demand as investors seek custody alternatives, but such events nonetheless raise confidence issues.

So, Bitcoin has run into a mix of macro and structural headwinds. A strong labor market has pushed Fed tightening back onto the agenda, while the fragile, short-squeeze nature of the August rally calls its durability into question. Do BTC bulls have the strength for another run at $80,000?

Technically, the daily chart shows that Bitcoin is consolidating between roughly 76,500 and 81,000. A drop below the fair-value level at 77,700 would activate the Anti-Turtles pattern and act as a sell signal. Adding fresh long positions makes sense only after a break above the pivot level of 81,200.