Analysis: Weak US employment data eased concerns about interest rate hikes, and the return of buying interest in Bitcoin spot ETFs, among other positive factors, drove a Bitcoin rebound.

According to BlockBeats, on July 3rd, weaker-than-expected US employment data eased market concerns about further tightening by the Federal Reserve and boosted demand for risk assets. Kyle Rodda, senior financial market analyst, stated that the data undermined claims of a renewed acceleration in the US labor market. The interest rate market is still pricing in a rate hike this year, but the implied probability has fallen from approximately 85% before the data release to 77%, and the probability of a rate hike this month has also decreased from approximately 30% to approximately 18%. Regarding fund flows, the US Bitcoin spot ETF recorded a net inflow of $224 million on Thursday, ending a 10-day streak of outflows, indicating that bargain hunting has returned after approximately $2.4 billion in redemptions. Analysts at QCP Capital stated that pressure in the options market also eased with the spot market rebound, with one-week at-the-money implied volatility falling from the mid-40% range to the high-30% range, and the term structure returning to a positive spread after inverting during the sell-off. However, the QCP believes the employment data is not entirely dovish. While job growth fell short of expectations, faster wage growth, a declining unemployment rate, and strong consumer spending suggest a contraction in labor supply rather than a cooling demand, leaving room for the Fed to maintain a hawkish stance. The QCP stated that the market has postponed rate hike expectations from September to December, but cross-asset performance does not yet support a genuine policy shift. Further attention should be paid to the CPI on July 14th, the PPI on July 15th, and the FOMC meeting at the end of the month.