Bitcoin, Ethereum, and XRP are rebounding after U.S. job data signaled a weakening labor market. Traders are now anticipating three Federal Reserve rate cuts this year, and markets will be looking to future nonfarm payrolls and unemployment statistics to ensure this.

Crypto Shorts Get Crushed as Prices Rebound

We also experienced high liquidations in the crypto market over the past 24 hours, amounting to $270 million. The worst affected were shorts, which lost 36 million in just one hour. More than 94,000 traders were liquidated, one of them a $2.25 million BTC-USDT order on OKX.

Bitcoin, Ethereum, and XRP prices all bounced as shorts closed positions. CoinGlass data shows Bitcoin recovered nearly $20 million, Ethereum $15 million, and XRP about $600,000 in just four hours. Analysts noted that retail and institutional traders quickly rotated out of bearish bets after the jobs data hit.

Market analyst Skew highlighted a $100 million BTC purchase that triggered the rebound. He explained that perpetual trading data showed clear rotation out of shorts and hedges. With expectations of a softer Fed, traders are shifting positions to benefit from a potential rally. The swift turnaround underlined how sensitive crypto remains to macroeconomic triggers.

Traders Brace for Fed Cuts After Weak Jobs Data

The CME FedWatch Tool now shows a 99% probability of a 25-basis-point cut on September 17. Traders also expect a total of 75 basis points in cuts by year-end. Expectations for a December cut have risen sharply, climbing to 47% after the release of weak labor reports.

Recent data, as well as the ADP employment change, jobless claims, and JOLTS job openings, indicate that the labor market is cooling. Economists forecast nonfarm payrolls at 75,000 for August, slightly above the previous 73,000. However, the unemployment rate is projected to rise to 4.3% from 4.2%. The outcome will determine if the Fed delivers deeper cuts.

Global markets are watching closely. A weaker-than-expected payrolls report could accelerate the rally in both stocks and crypto. Bitcoin price has already climbed 2% to $112,800, with intraday levels between $109,347 and $112,995. Trading volume has also risen 16%, signaling fresh investor interest after $4.5 billion in crypto options expired on Deribit.

ETH price is above 4,400 and more than 1% above its recent subsequent low of 4,268. XRP has been on a roll as well, with an increase of over 2 percent to $2.84. Both of these assets are beginning to resiliently recover after recent whale-led selloffs. The crypto rebound can continue further into September once the jobs report confirms weakness.