Bitcoin dominance is back in focus after weak U.S. jobs data. According to the source, the economy added just 22,000 jobs in August, far below the 75,000–80,000 range economists expected. Meanwhile, June was revised to a loss of 13,000 jobs, the first monthly decline since December 2020.
Markets react to soft labor report
Despite the miss, Bitcoin rose 0.5% above $113,000 on Friday morning, September 5. Ethereum, Solana, and XRP also posted gains. As a result, some retail traders appeared to anticipate potential Federal Reserve interest rate cuts.
Some economists suggest that the ideal scenario would reveal enough softness in the labor report to endorse the Fed’s rate cut without triggering recession fears. Therefore, sentiment tilted toward easier policy rather than immediate risk-off moves.
Why softness may support crypto liquidity
According to the source, a rate cut could increase liquidity and, potentially, price inflation for cryptocurrencies. However, recession anxiety remains a counterweight. Consequently, traders are weighing softer data against the risk of broader slowdown.
Key points market watchers are tracking include:
• Whether the Fed reads the jobs miss as sufficient for a cut.
• How liquidity trends translate into Bitcoin dominance and altcoin performance.
• Whether recession fears cap risk appetite despite policy support.
For background on macro-sensitive assets, this overview of the Federal Reserve explains how rate decisions influence markets. Meanwhile, if policy turns looser, Bitcoin dominance could strengthen as traders seek liquidity havens within crypto.
Looking ahead, the path of Bitcoin dominance will likely hinge on incoming data and the Fed’s tone. However, the latest jobs report has clearly shifted expectations toward cuts, which, according to the source, could bolster crypto liquidity.
New to the mechanics behind dollar-pegged tokens that often reflect liquidity shifts? Explore our guide on how stablecoins work.
