• Tomorrow's August jobs report is likely to go a long way to determining the size of the upcoming Fed rate cut
• Fed easing cycles are normally associated with good things for bitcoin, but not so much this time around

The U.S. government tomorrow will release its Nonfarm Payrolls Report for the month of August in what will be one of the final economic data points for the Federal Reserve to ponder prior to its rate-setting meeting later this month.

Economists are forecasting the U.S. to have added 160,000 jobs in August, up from July's soft 114,000 print. The unemployment rate is seen edging down to 4.2% from 4.3%. While a stronger-than-expected or even in line report is likely to result in the Fed just cutting its benchmark fed funds rate by 25 basis points, a soft number will surely have traders rushing to price in a 50 basis points move.

The balance of economic news this week – the ISM Manufacturing PMI, the Fed's Beige Book and the ADP August jobs report – so far has leaned soft, amping up the idea that the Fed might go for a bolder path of policy easing. According to CME FedWatch , there's a 44% chance of a 50 basis point rate cut vs a 34% one week ago.

Whither bitcoin?

There was a point in time not long ago when a speedy pace of monetary ease was thought to be a major positive catalyst for bitcoin (BTC) prices. The original crypto, after all, was invented during the global financial crisis more than 15 years ago alongside the Fed's rush to cut rates to 0% and pump hundreds of billions of freshly minted dollars into the economy.

Then the Fed's 2020 Covid-era push to again slash rates/pump money took bitcoin in the course of less than one year from a sleepy, fringy property into a $1 trillion asset class.

This coming easing cycle, though, is thus far generating zero enthusiasm for taking prices higher. Each signal over the past several weeks that rate cuts were coming has resulted in only a momentary break from bitcoin's downtrend. At the current $56,300, bitcoin is lower by 5% over the last month and off more than 23% from a record high above $73,500 touched six months ago.

Quinn Thompson, CIO of hedge fund Lekker Capital this morning was speaking about traditional markets, but it may as well have been bitcoin: "Every single piece of economic data this week has been weak," he wrote. "Conviction is rising in a 50 bps Fed cut in September. But you've been burned too badly for the past 6 months to press the buy button."

Read more: Bitcoin Retraces Below $57K as 'Sell-on-Rise' Action Continues