- Bitcoin climbed above $65,000 after U.S. payrolls unexpectedly fell by 23,000 in July, sharply weakening expectations for a September Fed rate hike.
- Analysts see $66,000 as Bitcoin’s next major test, although inflation, oil prices, and Fed policy could keep volatility elevated.
- Ethereum is showing relative strength, with analysts watching $2,000 as its next important resistance level.
Bitcoin moved back above $65,000 on Friday after a surprisingly weak U.S. employment report pushed investors to reconsider the likelihood of another Federal Reserve interest rate hike in September.
Bitcoin gained nearly 2% during the session and traded around $65,200 on Aug. 7. The move followed data showing that U.S. nonfarm payrolls declined by 23,000 in July, dramatically missing expectations for an increase of approximately 80,000 jobs.
June’s employment growth was also revised lower to 20,000 jobs from an initially reported 57,000, adding to signs that the U.S. labor market may be losing momentum.
Weak Jobs Data Changes the Fed Debate
The employment report immediately affected expectations surrounding the Federal Reserve’s next policy decision.
Capital.com senior financial market analyst Kyle Rodda described the payroll number as a major surprise that could lead markets to significantly reduce expectations for a September rate hike. The U.S. dollar weakened following the report, while precious metals and other risk-sensitive assets moved higher.
The unemployment rate unexpectedly declined from 4.2% to 4.1%, but analysts cautioned against interpreting that figure as evidence of a stronger labor market. Lower labor force participation contributed to the decline, potentially masking underlying employment weakness.
The numbers could also intensify discussion about whether artificial intelligence and automation are beginning to influence corporate hiring decisions.
A Hawkish Fed Remains Bitcoin’s Biggest Obstacle
The weaker labor market arrives at an awkward moment for the Federal Reserve.
Under Chair Kevin Warsh, policymakers have remained heavily focused on persistent inflation. However, deteriorating employment conditions could force the Fed to place greater weight on the labor-market side of its dual mandate.
The July decline, combined with downward revisions to previous employment figures, weakens the argument for officials advocating another rate increase.
Still, inflation risks have not disappeared. Higher oil prices and shipping disruptions associated with geopolitical tensions could keep price pressures elevated, meaning one weak employment report may not be enough to completely change Fed policy.
Bitcoin Targets $66,000 Resistance
Bitcoin briefly slipped below $65,000 before recovering, leaving traders focused on whether the cryptocurrency can now challenge the $66,000 resistance level.
21Shares senior crypto research strategist Matt Mena said Bitcoin appears positioned for another attempt at $66,000. A convincing move through that level could improve momentum and potentially open the door to a broader recovery.
However, analysts caution that Bitcoin may experience another bout of volatility first. Bitget Research chief analyst Ryan Lee argued that weaker economic data could initially trigger defensive positioning before investors fully embrace the prospect of easier monetary policy.
Upcoming inflation data, Fed commentary, and broader liquidity conditions will therefore remain critical to determining whether Bitcoin’s latest rebound develops into a sustained rally.
Ethereum Shows Stronger Momentum
Ethereum is also attracting attention as it approaches the psychologically important $2,000 level.
ETH recently recorded its strongest monthly performance since August 2025, returning approximately 18.5% while attracting more than $350 million into spot Ethereum ETFs.
The ETH-BTC ratio is also showing signs of stabilizing after a prolonged decline, potentially indicating that investors are beginning to rotate toward Ethereum and other crypto assets.
Historical seasonality provides another bullish argument. Bitcoin has averaged returns of around 5.8% during the third quarter and 66.7% during the fourth quarter, according to Mena.
If inflation remains contained, the Fed avoids additional aggressive tightening, and liquidity conditions improve, Mena believes Bitcoin reaching $100,000 before the end of 2026 remains achievable. For now, however, $66,000 represents the immediate test bulls need to overcome.
