Analysis: Bitcoin Faces Dual Game of "Rate Cut Trading" and Recession Risks

Odaily News The U.S. labor market has shown notable signs of cooling. Data shows that U.S. non-farm payrolls decreased by 23,000 in July, far below the market's previous expectation of an increase of 85,000, missing expectations by 108,000 — marking the third-largest monthly decline since the onset of the pandemic in 2020. Meanwhile, June's non-farm payroll figures were revised down by 37,000, further signaling a weakening trend in the labor market.

Following the release of the employment data, market expectations for a September rate hike by the Federal Reserve quickly declined. Data indicates that the probability of a September rate hike dropped sharply from roughly 70% to 40%, prompting investors to reprice the future path of Fed policy. Analysts suggest that a lower probability of rate hikes typically benefits risk assets, but the underlying reasons — weakening economic growth and a softening labor market — could also heighten market risk aversion. At the same time, gold prices have surpassed $4,400, reflecting rising demand for safe-haven assets.

For Bitcoin, the current market presents a dual impact: on one hand, a shift toward looser Fed policy could boost risk appetite, which is positive for crypto assets; on the other hand, continued deterioration in the labor market could limit upside potential for the market. The market will be watching next month's non-farm payroll data to see whether it further confirms the trend of slowing employment. If labor weakness persists, it could reinforce expectations of a Fed pivot toward easing — but it could also intensify concerns of an economic recession.