The non-farm payroll data released last Friday fell significantly short of expectations, and the market’s probability of a rate cut by the Federal Reserve in September has soared to 98% - 99%. Futures market traders have even begun to bet that the Federal Reserve might cut rates by 50 basis points all at once.
However, the cryptocurrency market did not immediately celebrate. There has been no significant rebound on BTC and ETH price ; on one hand, the market is concerned that the economic recession may shift from "liquidity support through interest rate cuts" to "recession worries," while on the other hand, Federal Reserve officials are trying to cool down market expectations.
The non-farm data is weak, and the expectation of interest rate cuts is heating up.
The data released by the U.S. Department of Labor on September 5 shows that non-farm payrolls increased by only 22,000 in August, far below the market expectation of about 76,500. The unemployment rate rose by 0.1 percentage points from the previous month to 4.3%, reaching its highest level in nearly four years.
In addition, the non-farm payrolls for June and July were revised down by a total of 21,000, further intensifying market concerns about a downturn in the labor market. These data clearly indicate that the U.S. labor market is showing signs of weakness.
The market reacted quickly, and the Federal Reserve’s observation tool at the Chicago Mercantile Exchange showed that expectations for the Federal Reserve to cut interest rates by at least 25 basis points at the September monetary policy meeting have significantly increased, while the possibility of a 50 basis point cut cannot be ruled out.
The gap between the market and the Federal Reserve’s expectations
There is a clear expectation gap between the market and the Federal Reserve. The market is considering "whether there will be a significant rate cut," while the Federal Reserve is considering "whether to cut rates."
Despite the weak non-farm data, Federal Reserve officials remain focused on the CPI data to be released this week, indicating their concern that the market’s "overinterpretation" has gotten out of control.
Federal Reserve official Goolsbee acknowledged: "Inflation in the service sector is rising." If inflation does not decline, the Fed will not hastily pursue an aggressive rate-cutting path solely based on a deterioration in employment. The Fed’s stance is that it does not want to allow financial conditions to ease prematurely to the point of losing control.
Institutional forecasts and the potential path of the Federal Reserve
Several major investment banks have made predictions regarding the Federal Reserve’s interest rate cut path:
Bank of America expects the Federal Reserve to cut interest rates by 25 basis points in both September and December. If the labor market weakens further, the Fed may also cut rates at the October meeting.
Morgan Stanley, Barclays, BNP Paribas, and Deutsche Bank all predict a 25 basis point rate cut in September and December, with a total rate cut of 50 basis points for the year.
UBS Group has made a more aggressive prediction, expecting the Federal Reserve to start a consecutive series of four rate cuts of 25 basis points each from September, totaling a reduction of up to 100 basis points.
BTC Market Analysis: Possibility of Breaking Previous Highs
Although September has traditionally been seen as a month of weak performance for Bitcoin, the current market structure and macro environment may drive BTC to reverse its trend this month.
Bitcoin is currently likely to fluctuate in the range of $105,000 to $110,000, an area that has shifted from previous resistance to solid support, or could become the starting point for the next round of upward movement.
A key positive signal is the emergence of a "hidden bullish divergence": although the price has retreated, the weekly relative strength index (RSI) has not concurrently made a new low.
Analyst ZYN predicts that Bitcoin is expected to break through its previous high and reach above $124,500 within the next 4 to 6 weeks, providing technical support for the rebound in September.
ETH Market Prediction: Can it Break 5000 USD?
The current trading price of Ethereum is approximately $4,386, showing resilience after dropping to around $4,200 in late August 2025. The $5,000 mark will become the next key milestone for investors and traders.
Technical analysis shows that Ethereum has formed a clear upward channel since June 2025. Key support levels are around $4,015 and around $3,533, while resistance levels are around $4,530 and around $4,800.
If ETH breaks the range of $4,600 - $4,650, the target price will extend to $4,800 - $5,000. If momentum is strong, a brief test of $5,200 is possible.
Fundamental factors also support the rise of Ethereum: by the end of August, approximately 1.4 billion USD flowed into Ethereum ETFs, and by the third quarter of 2025, the total net inflow of Ethereum spot funds is expected to exceed 33 billion USD.
Investment Strategies and Risk Warnings
The Federal Reserve’s interest rate meeting in September will be held from September 16 to 17 local time, with the interest rate decision and policy statement to be announced in the early hours of September 18 Beijing time. This will be a critical time point.
Despite the rising expectations for interest rate cuts, investors still need to pay attention to several risk points: the Federal Reserve will wait for the final CPI/PPI data confirmation before taking action—the expectation gap between the two has become the biggest risk point.
If the inflation data shows an unexpected rebound, especially in service sector inflation, it could disrupt the Federal Reserve’s rate cut plans.
In addition, changes in the global trade environment and significant changes in US economic and trade policies may also affect market expectations and cryptocurrencies.
Future Outlook
The US August CPI data released on September 11 will be the next key point. If the inflation data does not show an unexpected rebound, the Federal Reserve will almost certainly initiate a rate cut at the meeting on September 18.
Historical data shows that Bitcoin usually performs poorly in September, but September 2025 may differ from historical trends. A weakening dollar and expectations of interest rate cuts by the Federal Reserve could provide strong support for BTC and ETH.
Once the Federal Reserve begins a rate-cutting cycle, the cryptocurrency market may welcome a new round of bullish momentum, with BTC potentially challenging the historical high of $124,500, and ETH expected to break through the $5,000 mark.
