Bitcoin, Ethereum and XRP recorded strong gains as investors prepared for weaker U.S. nonfarm payroll data. Expectations of a cooling labor market increased hopes that the Federal Reserve may avoid raising interest rates.
Positive developments in U.S.-Iran negotiations, falling oil prices and softer inflation signals also supported the wider cryptocurrency market.
Bitcoin Climbs Above $61,000
Bitcoin gained more than 4% and reached a 24-hour high of $61,223.
The rally followed weaker-than-expected ADP private payroll figures, which suggested that hiring activity in the United States may be slowing. Lower oil prices also reduced concerns about renewed inflationary pressure.
Crypto market sentiment improved further after the ISM Manufacturing Prices Index declined sharply. Investors interpreted the data as another sign that inflation risks may be easing.
Wall Street Predicts Slower U.S. Job Growth
The U.S. Bureau of Labor Statistics was scheduled to release the June nonfarm payrolls report and unemployment rate on July 2.
Economists expected job growth to slow significantly compared with the previous month. The market’s average forecast stood at approximately 110,000 new jobs.
Individual forecasts varied considerably. Citigroup projected an increase of slightly more than 25,000 jobs, while Goldman Sachs and Standard Chartered estimated 130,000.
JPMorgan expected the economy to add around 125,000 jobs. Forecasts from Bank of America, HSBC and Capital Economics were closer to the wider market consensus.
A weaker payroll figure could strengthen expectations that the Federal Reserve will adopt a less restrictive monetary policy.
Unemployment Rate Expected to Remain Stable
Economists expected the U.S. unemployment rate to remain unchanged at 4.3%.
Average hourly earnings were forecast to increase by 0.3% on a monthly basis. However, the annual wage growth rate was expected to decline from 3.6% to 3.4%.
Slower wage growth could reduce inflationary pressure and give the Federal Reserve more flexibility when making future interest-rate decisions.
Fed Comments Support Bitcoin, ETH and XRP
Bitcoin, Ethereum and XRP also benefited from comments made by Federal Reserve Chair Kevin Warsh.
Warsh said inflation expectations had eased during the previous month. His remarks suggested that the central bank was not under immediate pressure to raise interest rates.
The CME FedWatch Tool showed that the probability of a September rate increase had fallen to around 50%.
Lower interest-rate expectations are often positive for cryptocurrencies because they can encourage investors to increase their exposure to riskier assets.
U.S.-Iran Talks Ease Inflation Concerns
Signs of progress in indirect negotiations between the United States and Iran helped push oil prices lower.
Falling energy prices can reduce inflationary pressure, which may influence the Federal Reserve’s monetary policy outlook. This development contributed to Bitcoin’s move above the $61,000 level.
The U.S. Dollar Index also declined to approximately 101.12 as traders waited for the official employment report.
Meanwhile, the yield on the 10-year U.S. Treasury note rose to around 4.49%.
Crypto Prices Give Back Some Gains
Bitcoin later gave back part of its earlier advance and traded near $60,095.
During the previous 24 hours, BTC moved between a low of $58,263 and a high of $61,223.
Ethereum traded at approximately $1,615, while XRP changed hands near $1.05.
The upcoming U.S. employment figures could determine whether the crypto market extends its recovery or faces renewed selling pressure.
