Bitcoin and most altcoins declined on Friday, July 4, as investors booked profits, trade jitters resurfaced, and expectations for a Federal Reserve interest rate cut diminished.
Bitcoin (BTC) dropped to $107,800, retreating sharply from this week’s high of $110,200. Leading the losses among altcoins were SPX6900 (SPX), Ethena (ENA), Dogwifhat (WIF), and Pepe (PEPE).
Bitcoin and altcoins likely dropped because of the recent US nonfarm payrolls jobs data and their implications to the Federal Reserve. In a report on Thursday, the Bureau of Labor Statistics said that the economy added 147,000 jobs in June, while the unemployment rate dropped to 4.2%.
The figures were better than the expected addition of 100,000 jobs and contrasted with the ADP report, which had indicated a loss of over 33,000 private-sector jobs. The unemployment rate was also lower than forecasts, which had projected a rise to 4.3%.
The report means that the Federal Reserve will not cut interest rates in July as Jerome Powell hinted earlier this week. Bitcoin and other altcoins do well when there are hopes of interest rate cuts.
The crypto market also pulled back as the July 7 deadline for new tariffs approached. President Donald Trump has so far reached agreements with China, Vietnam, and the UK, but deals with key trading partners including Japan, South Korea, and the European Union remain unresolved. This raises the risk of an extended trade war.
Bitcoin and other crypto tokens crashed in April after the Liberation Day speech and then bounced back after Trump announced the three-month pause to allow for negotiations.
Bitcoin and altcoins dropped because of the US holiday and profit-taking
The U.S. Independence Day holiday also contributed to a decline in trading activity, adding to downward pressure on digital assets. According to CoinMarketCap, 24-hour trading volume fell 33% to $94.57 billion.
The decline appears partly driven by profit-taking, as traders locked in gains from the recent rally. Several of the week’s best performers, including Pudgy Penguins, Bonk, Fartcoin, and Dogwifhat, were among Friday’s top laggards.
Still, the ongoing retreat could be temporary since Bitcoin has strong fundamentals, with ETF demand rising and supply on exchanges falling. It has also formed a cup-and-handle and a bullish flag pattern, pointing to a rebound in the near term.