Bitcoin continued its rise on Thursday, extending gains from the previous session amid new signs of progress in US trade relations, despite ongoing trader caution ahead of a series of important US economic data releases later in the day.
The world’s largest cryptocurrency appeared to have broken out of its trading range between $103,000 and $108,000 on Wednesday, though it remains uncertain whether this price breakout will sustain.
Bitcoin rose 2.3% to $109,613.8 by 05:15 GMT. Broader cryptocurrency prices also gained amid improved risk appetite. Strong gains in US markets overnight — with the S&P 500 reaching a new record high — helped boost sentiment.
Trade optimism boosts Bitcoin
Bitcoin benefited from improved risk appetite following the announcement of a US-Vietnam trade deal, Washington’s third agreement ahead of the July 9 tariff deadline.
Markets were also encouraged by Washington’s easing of some chip export restrictions to China after an initial trade agreement was reached in June.
This trade progress raised investor hopes for more US trade deals before next week’s deadline. US officials said a deal with India is close, though talks with Japan and South Korea have faced setbacks.
President Donald Trump hinted he does not plan to extend the July 9 deadline, after which higher tariffs will be imposed on several major trading partners.
Tax bill and jobs report in focus
Attention also centered on the massive tax bill in Congress, which Trump said the House would vote on later Thursday. However, reports indicate the bill is still under study and discussion in the House.
Preliminary votes show at least five Republicans oppose the bill, potentially jeopardizing its passage.
Key concerns relate to the bill’s potential impact on national debt and the country’s fiscal health, with critics warning it could increase economic risks in the US.
A series of US labor market data will be released later Thursday, most notably the June nonfarm payrolls report. Expectations of Federal Reserve rate cuts are rising, with any strong signals of labor market slowdown likely to increase chances of monetary easing.
Does eurozone money supply growth support Bitcoin’s rise?
While it is difficult to pinpoint a single driver for Bitcoin’s rise on Wednesday, the broad money supply (M2) in the eurozone reaching a record high in April likely played a significant role. Data released Monday showed 2.7% year-on-year growth, aligning with the US’s expanding monetary base.
Meanwhile, ADP data showed US private sector jobs declined by 33,000 in June.
Some market participants view weak demand for leveraged Bitcoin positions as reflecting rising recession fears, especially amid escalating global trade tensions. Trump threatened to raise tariffs on Japanese goods above 30% if no deal is reached by July 9.
In this context, eurozone ambassadors asked EU Trade Commissioner Maroš Šefčovič to take a tougher stance during his Washington visit this week, according to the Financial Times. Some European capitals have called for lowering the current 10% mutual tariffs, despite ongoing internal disagreements over the merits of retaliation.
Options markets and China demand indicators show waning enthusiasm
To gauge derivative market weakness, Bitcoin options markets are instructive. If traders expect a sharp drop, the 25% delta skew rises above 6% as demand for put options exceeds call options.
Currently, this indicator stands at 0%, unchanged from two days ago, indicating the market sees balanced odds of upward or downward moves. While reflecting subdued sentiment at the \$109,000 level, this is an improvement from the pessimism recorded on June 22.
Despite Bitcoin reaching a three-week high, investor appetite in China has sharply declined, according to stablecoin demand indices.
The current 1% discount on Tether (USDT) versus the US dollar in China — the deepest since mid-May — reflects fading confidence in Bitcoin’s recent gains.
Trader concerns over ongoing trade war fallout have increased, especially after Bitcoin exchange-traded funds (ETFs) saw net outflows of \$342 million on Tuesday. Weak derivative market activity mirrors broader economic uncertainty.
