The Bitcoin (CRYPTO: BTC) price dipped over the weekend, falling as low as US$22,911 after trading for as high as US$23,467 on Friday.
The world's top crypto has regained some of the weekend's losses, up just over 1% since this time yesterday. One BTC currently trades for US$23,331.
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Bitcoin price pressured by strong US labour report
The Bitcoin price came under selling pressure following the release of July's job report by the United States Labor Department.
That report showed the world's biggest economy added 528,000 jobs last month, far exceeding consensus estimates of 250,000 new jobs.
In June, the US added 398,000 new jobs.
The jobs growth saw the US unemployment rate fall to 3.5% in July, compared to expectations of 3.6%. This brings the US unemployment rate back to the half-century highs it was at in the months immediately before the pandemic shuttered much of the world in early 2020.
Why is this good news bad?
Strong employment growth in the US is, of course, largely a good thing.
However, the strength saw the Bitcoin price retrace alongside other risk assets, with the tech-heavy NASDAQ closing 0.5% lower on Friday.
That's because investors have been hoping recent interest rate rises by the US Federal Reserve and other global central banks, including the RBA, would already show some impact on tamping down inflation.
But the US jobs report stoked fears that the Fed will need to continue on its tightening path for some time yet before taking a more dovish approach, which would broadly benefit growth shares and cryptos.
Discussing the hit to the Bitcoin price, markets analyst at Oanda Craig Erlam said (courtesy of Bloomberg):
That was not a good jobs report for risk assets. That could worsen any slump further down the road, which is why we're seeing risk assets sinking and Bitcoin is very much among them. It's still a little higher on the day, but it's given back a fair bit of its earlier gains.
Head of research at Valkyrie Investments Josh Olszewics said, "The Fed is likely less concerned with recessionary conditions and more focused on their dual mandate of inflation and unemployment."
Adding that the Fed is "likely to continue with successive rate hikes", Olszewicz said this will impact the demand for alternative assets.
And that, as we know, will throw up headwinds for the Bitcoin price.
