Bitcoin dips to around $106,000 as traders derisk ahead of key US data releases

The overall crypto market declined over the past day, with bitcoin hovering around the $106,000 level as traders derisk ahead of key U.S. economic data releases. 

Bitcoin fell 1% in the past 24 hours to $106,013, while ether lost 2.5% to trade at $2,423, according to The Block’s price page. The Block's GMCI 30 index, which measures the performance of the top 30 cryptocurrencies, dropped 2%.

"Markets remain in a cooling consolidation period, as participants await clarity from upcoming jobless claims on July 3 or broader macro resolution," said Vincent Liu, CIO of Kronos Research. "For now, liquidity remains weak, and positioning is patient." 

Nick Ruck, director of LVRG Research, told The Block that bitcoin dropped as traders derisk prior to important U.S. economic data releases, while Trump's tax bill passed the Senate, delivering concerns over the U.S. deficit and effectiveness of the bill.

The Senate passed President Trump's tax bill on Tuesday, advancing the legislation to the House for a potential final vote. The bill seeks to cut trillions of dollars in taxes while reducing spending on Medicaid, among other measures. A crypto tax provision strongly supported by industry advocates was ultimately left out of the final package.

Later on Thursday, the U.S. is set to release a slew of labor market data, including May job openings from the U.S. Job Openings and Labor Turnover Survey, as well as June non-farm payrolls and the unemployment rate.

"Macro data and the progress on Trump's tax bill in the Congress would be some of the key things driving overall risk-asset prices, including cryptos," said Peter Chung, head of research at Presto Research. 

Chung added that a key thing to watch now would be the liquidity conditions "as there are early signs that we may potentially see significant improvement."

Meanwhile, Federal Reserve Chair Jerome Powell said at the European Central Bank's forum on Tuesday that decisions on rate cuts will depend on incoming data, but he didn't give hints on the timing of rate cuts.

While the crypto market is down, Chung of Presto said he wouldn't "read too much into these price moves."

"They might look big by TradFi standards, but not for crypto," said Peter Chung, head of research at Presto Research. "A good rule of thumb is to scale down crypto price moves by a factor of five, and that's your equity market equivalent."