Key takeaways:
Potential Federal Reserve rate cuts into weak US jobs data could fuel Bitcoin’s next rally.
BTC holds key support and eyes $129,000 after rebounding from its wedge pattern.
Bitcoin (BTC) dropped below $111,000, mirroring declines in the US stock market after the Bureau of Labor Statistics (BLS) slashed 911,000 jobs from payroll data, the steepest cut in history.
Could BTC sink further as US recession risks grow? Let’s examine.
US stock market history suggests BTC owners “will reap the rewards”
The BLS cut 880,000 jobs from the private sector and 31,000 from the government in its March 2025 benchmark revision. Unemployment rose to 4.3%, while employers added only 22,000 jobs in August, versus 75,000 expected.
Core Personal Consumption Expenditures (PCE) inflation held at 2.9%, raising recession risks. Unless the Federal Reserve intervenes with looser monetary policies.
Bond traders are already betting that the central bank officials will greenlight a 25 basis point rate cut in September, with odds climbing toward 92% as of Tuesday. Two more rate cuts may follow by 2025’s end, CME data reveals.
“The Fed will be cutting rates into hot inflation because the labor market is weak,” market commentator, The Kobeissi Letter, wrote, adding:
“Asset owners will reap the rewards.”
History shows the same.
In the 1990–1991 recession, for instance, the US Federal Reserve slashed rates to 3% from 8.25% even as core PCE hovered around 4% and unemployment climbed to 6.8%.
Stocks initially fell by over 20% but rebounded more than 30% the following year as cheaper Fed credit revived growth.
In 2025, gold has surged 40% in the months leading up to the BLS revision, with the Kobeissei Letter noting that the metal traders have “priced-in [weaker job numbers] for months” already.
Bitcoin has jumped 20.30% so far in 2025 under similar conditions, and may mirror gold’s price rally if the history of their lagging correlation is any indication.
Related: Bitcoin taps $113K as analysis sees ‘return to highs’ on Fed rate cut
Can Bitcoin rise to a new record high?
Technically, Bitcoin looks primed to break above its record high of $124,500.
The cryptocurrency has rebounded from the rising wedge’s lower trendline, suggesting bulls are regaining control with an upside target near the 1.618 Fibonacci extension at $129,000, a potential 12% to 15% gain.
At the same time, Bitcoin continues to trade above its 20-week exponential moving average (EMA, the red wave at around $108,500), reinforcing the bullish outlook and confirming strong support beneath current levels.
A decisive close above the $115,000–$116,000 resistance zone could bring the buyers back, accelerating the rally toward new all-time highs and marking the next leg of Bitcoin’s bull cycle.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
