TLDR
U.S. job data crushed expectations, leading to a sharp Bitcoin pullback from nearly $110K, as rate cut bets fade.
Strong June job additions suggest no Fed rate cuts until September 2025, sparking volatility in Bitcoin’s price action.
Bitcoin’s $108K support holds strong; traders eye $112K–$120K targets, despite recent U.S. data-driven volatility.
$520M in short positions near $111K could trigger a Bitcoin short squeeze, pushing prices toward $117.5K.
Bitcoin price saw significant volatility on Thursday as U.S. employment data exceeded expectations, resulting in a sharp reversal in price action. The cryptocurrency initially surged toward $110,000 but quickly retraced much of its gains. Market analysts noted that this shift was primarily due to stronger-than-expected U.S. job reports, which led to a decrease in the odds of the Federal Reserve lowering interest rates in the near term.
U.S. Employment Data Fuels Market Shift
On Thursday, U.S. nonfarm payrolls data revealed that job additions in June surpassed forecasts, while the unemployment rate dropped unexpectedly. The data suggests that the labor market remains robust, providing the Federal Reserve with less incentive to cut rates before its September meeting. According to The Kobeissi Letter, a financial analysis resource, the jobs data “crushed expectations,” signaling a continued strength in the U.S. economy.
BREAKING: The US economy adds 147,000 jobs in June, above expectations of 111,000.
The unemployment rate FALLS to 4.1%, below expectations of 4.3%.
The May jobs number was revised UP from 139,000 to 144,000.
The headline numbers continue to crush expectations.
— The Kobeissi Letter (@KobeissiLetter) July 3, 2025
In response to these reports, Bitcoin retraced a portion of its earlier gains, which had seen the cryptocurrency reach nearly $110,300 earlier in the day. The sharp drop in Bitcoin’s price highlights the sensitivity of the cryptocurrency market to economic data, especially when it influences Federal Reserve policy expectations. Bitcoin’s volatility underscores its ongoing dependence on macroeconomic factors, which continue to impact the broader crypto market.
Federal Reserve Likely to Delay Rate Cuts
The stronger-than-expected jobs report has significantly altered market expectations for U.S. interest rate cuts. Analysts from Blacknox, a business consulting firm, stated that the unemployment rate decline removes the possibility of a Federal Reserve rate cut in July.
This shift in sentiment is seen in the futures markets, where there is now a reduced expectation for any changes in U.S. interest rates before September 2025. The probability of a rate cut in July dropped sharply, with Fed Funds Futures indicating only two rate cuts until December 2025.
“Fed Funds Futures now just price in 2 cuts in total until December 2025,” noted Andre Dragosch, European head of research at Bitwise, a crypto asset manager. The reversal of market expectations for rate cuts led to a temporary pullback in Bitcoin’s price, which had been rising in anticipation of monetary easing. The shift in sentiment reinforces the complex relationship between cryptocurrency prices and traditional financial markets, especially when central bank policy is a factor.
Bitcoin’s Technical Setup Remains Resilient
Despite the volatility triggered by the U.S. jobs data, Bitcoin’s technical market structure remains relatively intact. According to Keith Alan, co-founder of Material Indicators, the current market conditions are likely to be short-term in nature. Alan pointed out that while the immediate price movement reflected market overreaction, the long-term outlook remains positive. A stronger economy could ultimately support the broader market, including cryptocurrencies.
Data from CoinGlass suggests that Bitcoin’s price structure remains supported by strong liquidity levels above and below the current price, with critical levels remaining intact. Analysts continue to focus on the $108,000 support level, which they see as crucial for maintaining a bullish trajectory. Traders are looking for Bitcoin to maintain support at this level before attempting further gains toward $112,000 or even $120,000 in the coming weeks.
Liquidity and Short Squeeze Potential
Bitcoin’s liquidity structure also shows potential for a price surge in the near term. According to CoinGlass data, there is a significant cluster of short liquidations near the $111,320 mark, with nearly $520 million in leveraged positions at risk. Should Bitcoin’s price approach this level, it could trigger a short squeeze, pushing the price higher. Historically, negative funding rates, like those seen in June, have preceded price surges, indicating that market sentiment may shift quickly.
BTC’s negative funding rate during June, which indicated a bearish sentiment, was followed by a sharp price increase, taking Bitcoin from below $100,000 to around $108,000.
With the current recovery in funding rates and the strong liquidity levels in place, Bitcoin could once again test higher levels, potentially reaching $117,500 as predicted by some analysts. The potential for a short squeeze adds an additional layer of uncertainty, suggesting that Bitcoin could break through critical resistance levels in the coming days.
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