Bitcoin moved above the important $61,000 level after the latest U.S. employment report showed that job creation slowed sharply in June. The weaker-than-expected data increased speculation that the Federal Reserve may avoid raising interest rates in the coming months.
U.S. Job Growth Misses Expectations
According to data from the U.S. Bureau of Labor Statistics, the economy added only 57,000 jobs in June. Economists had expected approximately 115,000 new positions.
The latest figure also followed a downward revision to May’s employment data. The number of jobs added in May was reduced by 43,000, adding to concerns that hiring activity is losing momentum.
Meanwhile, the U.S. unemployment rate came in at 4.2%. This was slightly lower than the expected rate of 4.3%.
Although unemployment remained relatively stable, the sharp slowdown in job creation suggests that conditions in the American labor market remain uncertain.
Bitcoin Recovers Above $61,000
Bitcoin reacted positively to the employment report and climbed to approximately $61,500. The cryptocurrency gained more than 2% from its intraday low below $60,000.
Earlier in the week, Bitcoin had fallen under the $60,000 level as investors became increasingly concerned about the possibility of another Federal Reserve interest-rate increase.
However, weaker job growth could reduce the pressure on policymakers to tighten monetary policy further. As a result, investors may be becoming more optimistic about the outlook for risk assets such as Bitcoin.
Federal Reserve Rate-Hike Expectations Decline
Expectations for another U.S. interest-rate increase weakened after the jobs report was released.
Polymarket data showed that the estimated probability of a Federal Reserve rate hike this year declined to 50%. That figure had stood at approximately 54% one day earlier.
Market expectations have also shifted regarding the possible timing of a rate increase. Investors are now less confident that the Fed will raise rates by October, with December becoming the more likely period being considered.
Kevin Warsh Comments Support Bitcoin Sentiment
Bitcoin also received support from comments made by Federal Reserve Chair Kevin Warsh during the ECB Forum.
Warsh avoided giving specific guidance about the future direction of monetary policy. However, he indicated that inflation-related risks were beginning to ease.
These remarks reduced concerns that the central bank would need to raise interest rates again this year. Lower interest-rate expectations are generally supportive of Bitcoin and other risk-sensitive investments.
Markets Expect Rates to Remain Unchanged
Investors currently expect the Federal Reserve to leave interest rates unchanged during the July Federal Open Market Committee meeting.
According to CME FedWatch data, the probability of the Fed maintaining its current interest-rate range rose to 82.4%. That was significantly higher than the roughly 72% probability recorded the previous day.
For now, Bitcoin traders will continue monitoring employment, inflation and Federal Reserve statements. Further signs of weakness in the U.S. economy could strengthen expectations for easier monetary policy and provide additional support for the cryptocurrency market.
