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Bitcoin Price Rises as Traders Eye September Rate Cut
Bitcoin climbed modestly on Friday, extending gains from earlier in the week amid a broader rally in risk assets. Investors and traders are closely watching upcoming U.S. nonfarm payroll data for clues on the Federal Reserve’s likely move on interest rates in September.
Bitcoin Gains Amid Broader Market Optimism
At 01:35 ET (05:35 GMT) on Friday, Bitcoin was trading up 0.8% at $111,537.3. The cryptocurrency recovered some of its steep August losses this week, reflecting cautious optimism in digital asset markets.
Despite Bitcoin’s modest uptick, the wider cryptocurrency market was relatively flat, holding steady after a volatile August. Altcoins largely remained rangebound, with limited movement throughout the week.
Nonfarm Payrolls Data in Focus
The market’s interest in Bitcoin’s price performance is tightly linked to expectations around the Federal Reserve’s policy direction. Traders are betting that weak U.S. labor market data will increase the chances of a rate cut at the Fed’s upcoming September 16-17 meeting.
Several Federal Reserve officials recently indicated that a softening labor market may prompt the central bank to ease monetary policy. These remarks echoed Fed Chair Jerome Powell’s statements from August, emphasizing that the Fed is monitoring job market weakness closely.
This week’s labor data, including disappointing job openings and higher-than-expected unemployment claims, added to the growing speculation about a possible rate reduction.
The highly anticipated nonfarm payroll report, scheduled for release at 08:30 ET (12:30 GMT) on Friday, is expected to confirm subdued employment growth in August, reinforcing signs of a cooling job market. Market watchers see this report as a key factor in determining whether the Fed will proceed with a rate cut.
According to CME FedWatch data, futures markets currently price in a more than 96% probability that the Fed will reduce rates by 25 basis points at its mid-September meeting.
What Lower Rates Mean for Crypto Markets
Lower interest rates typically enhance liquidity in financial markets and encourage risk-taking, which can benefit asset classes like cryptocurrencies. By freeing up capital, rate cuts may make speculative investments more attractive.
As a result, Bitcoin and other digital assets often react positively to expectations of looser monetary policy.
Weekly Crypto Price Movements: Bitcoin Outperforms Altcoins
Over the past week, Bitcoin recorded a gain of approximately 2.6%, marking a modest but notable recovery following several consecutive weeks of declines. These declines came in the aftermath of the record highs reached in late August, a period marked by increased volatility and profit-taking among traders. Although Bitcoin remains largely confined within a relatively narrow trading range, this recent upward movement suggests a potential shift in market sentiment.
Part of this stabilization and moderate rebound can be attributed to growing institutional interest, as more large-scale investors and asset managers begin to re-engage with the digital asset space. High-profile purchases and renewed inflows into Bitcoin-focused investment products have contributed to restoring confidence in the market.
