After briefly surging above $122,000, BTC has seen a sharp pullback—prompting traders to reassess whether the long-awaited bitcoin recovery is still on track or losing steam. Although the price remains above the crucial $110K support zone, the recent correction coincides with mixed signals from the U.S. economy that could shape BTC’s trajectory in the weeks ahead.
With investors increasingly sensitive to macroeconomic shifts, key indicators like jobless claims, Fed rate probabilities, and labor productivity are taking center stage in Bitcoin recovery narratives.
Labor Market Resilience Could Delay Full Bitcoin Breakout
The latest U.S. labor data suggests the economy is not yet on the brink of recession—a factor that could delay aggressive monetary easing and, in turn, a full-fledged Bitcoin rally.
Kevin Gordon, Senior Investment Strategist at Charles Schwab, noted in a tweet that the 4-week average of initial jobless claims has moved sharply lower, showing continued strength in employment.
Historically, Bitcoin tends to perform best during periods of economic stress or policy shifts toward liquidity easing. However, a resilient labor market reduces the urgency for rate cuts, potentially stalling bullish momentum in the short term.
Markets Now Price in September Rate Cut
Despite the strength in jobs data, traders are increasingly betting that the Federal Reserve will cut rates at its next meeting on September 17. According to the CME FedWatch Tool, the probability of a cut to the 400–425 bps range now stands at 83.5%, up from just 63.1% a week ago.
Source: CME FedWatch Tool
If confirmed, a rate cut could re-ignite Bitcoin momentum by boosting risk appetite. However, the rationale behind the cut will be key. If it’s driven by confidence in disinflation and soft landing prospects, BTC may benefit. But if markets interpret it as a response to deeper structural weaknesses, investor sentiment could remain cautious.
AI Hype Meets Productivity Reality
Amid all the enthusiasm around artificial intelligence and its transformative potential, real-world productivity data tells a more muted story. The nonfarm labor productivity in the U.S. has grown at a tepid pace, reaching just +2.7% year-over-year—well below the peaks of previous economic cycles.
Source: David Stockman’s Contra Corner
If the AI boom fails to generate the kind of broad-based productivity surge seen in the 1990s, then the bullish narrative supporting tech stocks—and by extension Bitcoin—could lose strength. For now, the disconnect between expectation and actual output may be weighing on investor confidence.
Final Thoughts: Can Bitcoin Recovery Resume in August?
The Bitcoin recovery remains in play, but faces clear headwinds. On the one hand, a stable job market and expected rate cuts create a supportive macro backdrop. On the other, disappointing productivity growth and lingering doubts around AI-driven gains are injecting uncertainty.
BTC must hold above $110K to maintain its bullish structure, and macro indicators in the coming weeks—especially from the Fed and labor markets—will determine whether this is just a healthy consolidation or the beginning of deeper weakness.
