Bitcoin and Ether traded higher following a tentative ceasefire in the Iran-Israel conflict.

Market attention is now shifting to key economic data and remarks from central banks this week.

As of June 30, 2025, Bitcoin rose 1% over the past 24 hours to US$108,423. Ether gained 2.8%, reaching US$2,499.

This rebound follows recent losses that saw Bitcoin dip below US$100,000 amid heightened geopolitical tensions.

Traders are monitoring upcoming macroeconomic releases, including May job openings, June nonfarm payrolls, and the US unemployment rate.

Federal Reserve Chair Jerome Powell is scheduled to speak on July 1, 2025, at the European Central Bank forum, alongside central bank leaders from the UK, South Korea, and Japan.

He recently indicated that the Fed is not rushing to lower interest rates.

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🔗 Source: The Block

🧠 Food for thought

1️⃣ Labor market data: the crypto market’s overlooked barometer

Bitcoin’s recent movements above $108,000 demonstrate how crucial employment data has become for cryptocurrency prices in the current economic environment.

Historical patterns reveal that weak labor data often precedes Bitcoin rallies, with analysis showing a typical 105-day lag between declining job openings and significant price increases 1.

The upcoming JOLTS report and nonfarm payrolls data this week could significantly impact Bitcoin’s trajectory, with weaker numbers potentially supporting a rally toward $115,000 by July as predicted by Bitfinex analysts 2.

The sensitivity to employment figures highlights how Bitcoin has evolved beyond its early narrative as a hedge against traditional financial systems to become increasingly integrated with macroeconomic cycles.

2️⃣ Bitcoin’s inelastic supply amplifies price volatility during market shifts

Bitcoin’s fixed maximum supply of 21 million coins creates fundamentally different market dynamics compared to traditional assets with elastic supply, explaining its dramatic price swings.

When demand fluctuates, Bitcoin’s price must absorb the full impact because supply cannot expand in response, similar to how commodities with supply constraints behave during demand shocks 3.

This inelasticity contributed to Bitcoin’s extreme volatility during previous cycles, including its dramatic rise to nearly $20,000 in 2017 followed by a crash to below $4,000 in 2018 4.

The current “Greed” score of 66 on the market sentiment index suggests elevated investor optimism, creating conditions where small shifts in market positioning can trigger significant price movements 5.

Understanding this supply-driven volatility helps explain why seemingly modest changes in macroeconomic conditions or investor sentiment can produce outsized effects on Bitcoin’s price compared to traditional financial assets.

3️⃣ Market sentiment indicators provide critical context for price movements

The Bitcoin Fear and Greed Index reading of 66 mentioned in the news reflects a market currently dominated by optimism, a stark contrast to periods of “extreme fear” that have historically signaled buying opportunities.

During previous market downturns, such as when Bitcoin fell below $8,000, the index plunged to just 12 out of 100, indicating “extreme fear” among investors—a sentiment that often marks market bottoms 5.

These sentiment indicators compile multiple factors including volatility, market momentum, social media activity, and trading volumes to quantify investor psychology beyond price movements alone.

Historical analysis shows that extreme readings in either direction often precede significant market reversals, with the current “greed” reading suggesting caution may be warranted despite Bitcoin’s strong performance.

As Federal Reserve Chair Powell prepares to speak at the ECB forum, these sentiment metrics provide crucial context for how markets might interpret his comments, potentially amplifying or moderating price reactions based on prevailing investor psychology.

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