Bitcoin Stalls Above $85,000 as Weak Jobs Report Cuts Odds of an October Rate Hike

The bitcoin price pushed back toward its eight-month high early Monday before stalling, as traders weighed a weak U.S. jobs report that cut the odds of another Federal Reserve rate hike this month.

Bitcoin topped $86,600 in Asian trading, according to CoinGecko data, about $500 short of its late-September peak above $87,000, the highest level since January. It then slipped to about $85,500 before recovering to around $86,250 at the time of writing, up 1.4% over 24 hours.

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U.S. employers added just 29,000 jobs in September, the Bureau of Labor Statistics reported on Friday. That trailed the 12-month average of 45,000 jobs a month. The unemployment rate stood at 4.2%. The agency also revised July to a loss of 10,000 jobs and August to a gain of 133,000, leaving the two months a combined 60,000 jobs lower than first reported. Average hourly earnings rose 0.1% on the month and 3.0% from a year earlier.

Economists had expected a gain of more than 80,000, and traders responded by trimming bets on a hike at the Fed’s Oct. 28 decision. CME’s FedWatch tool put the odds of a quarter-point increase at 17% after the report, down from close to 36% a week earlier.

“This report strengthens the case for the Federal Reserve to remain patient,” Adam Schickling, a senior economist at Vanguard, said in comments published by CNBC. “The labor market has not deteriorated sharply, but there is also little evidence that it has meaningfully strengthened, giving policymakers reason to wait for additional data.”

Bitcoin’s first move on the data did not hold. The price rose to about $86,800 in the hour after the 8:30 a.m. ET release, then fell to roughly $84,250 by mid-afternoon, CoinGecko data show. It traded near $84,500 through Saturday before a late-Sunday rally carried it back above $86,000.

Two days before the jobs report, the Fed’s favored measure of inflation, the personal consumption expenditures index, had come in below forecasts.

The Fed raised its benchmark rate by a quarter point to a range of 3.75% to 4% in September, its first increase in more than three years and the first policy change under Chairman Kevin Warsh. Traders still expect one more move this year: FedWatch odds of a December hike stood above 75% after Friday’s report.

The October jobs report is scheduled for Nov. 6, just over a week after the Fed’s next decision.

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