Weak U.S. Jobs Data Sparks Bitcoin Slide: Risk-Off Returns

• Bitcoin lost 1.36 percent in a day after weak U.S. job numbers hit the market.
• Only 73K jobs were added in July, which made investors shift from risky trades.
• Traders are now watching the Fed for a possible rate deduction as fear keeps growing.

The U.S. economy added just 73,000 jobs in July, falling sharply below the forecast of 110,000, marking the weakest monthly gain in nearly five years. In addition, nonfarm payrolls for May and June were revised down by a combined 258,000 jobs, casting further doubt on labor market strength. The unemployment rate rose to 4.2%, signaling growing pressure in the employment sector. This development triggered immediate reactions in both traditional and digital markets, prompting investors to seek safety in cash and government bonds.

Source: X

Investor Sentiment Shifts Amid Rising Recession Fears

Equity markets responded negatively to the weak data. The S&P 500, Nasdaq, and Dow Jones declined between 1.3% and 1.7% in a single trading session. This marked a clear shift away from risk assets, with investors increasingly wary of economic deterioration.

In fixed-income markets, U.S. Treasury yields dropped sharply as demand surged for safer investments. The U.S. dollar weakened, while traditional safe havens like gold and the Japanese yen posted notable gains. These movements reflected a broader flight to safety following renewed fears of recession and monetary instability.

This synchronized pullback came as the market grappled with President Trump’s renewed tariff threats, compounding concerns already fueled by labor market softness. Economists have begun debating whether deteriorating macro conditions are forcing the Federal Reserve to accelerate its policy shift.

Bitcoin Declines Below $114K Amid Risk-Off Move

Bitcoin (BTC) fell by 1.36% in 24 hours, trading at $113,869.54 on August 2, according to CoinMarketCap. It dropped from an intraday high of $117,750, hitting a low of $113,000 during overnight trading.

Market capitalization for Bitcoin stood at $2.26 trillion, reflecting a 1.36% loss. Despite this decline, trading volume surged 8.03%, reaching $81.97 billion, indicating strong selling pressure. The circulating supply remained at 19.9 million BTC, with a 3.57% volume-to-market cap ratio. Bitcoin also retained a 100% profile score, but technical indicators suggested continued downward pressure.

Related: BTC Hits $97K After CME Gap Fill and Futures Activity Surges

Charts showed that Bitcoin mirrored broader market reactions. The selloff coincided with the fall in U.S. stocks and rise in safe-haven demand. Analysts pointed out that this behavior contradicted the long-standing view of Bitcoin as a recession hedge.

Has Bitcoin Lost Its Hedge Appeal in a Risk-Off World?

This episode reignited the debate over Bitcoin’s role during economic uncertainty. Analysts now question whether macro risks are reshaping Bitcoin’s utility as a hedge. This downturn also seems to suggest that crypto prices might move in tandem with equities, especially in periods characterized by extreme risk aversion. While some investors anticipated a surge in Bitcoin amid rate cut expectations, that movement never got off the ground. Instead, the money rotated toward treasuries and money market accounts.

What happened after the jobs data release was that the expectations of a rate cut shot up. The CME FedWatch Tool showed that the odds of a Fed rate cut beginning in September pierced above 40% to something between 67% and 83%. Some futures markets went further and almost fully priced in further rate cuts this year.

Still, almost counterintuitively, the more possible the realization of an easing policy, the less confident investors have been in crypto. It almost looks like investors are willing to settle for liquidity and safety rather than risking it for growth—at least for now.

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