Bitcoin failed to break through the $116,000 resistance level on Friday, retreating sharply as bullish momentum faltered despite supportive data from the US labour market and increasing expectations of a Federal Reserve rate cut. The leading cryptocurrency briefly touched a high of $115,970 before reversing course, dipping to near three-week lows as traders reassessed risk appetite.
Labour data lifts markets—but not crypto
The US jobs report for July showed modest gains and cooling wage pressures, reinforcing investor expectations that the Federal Reserve could begin cutting rates as early as September. Futures markets now price in a 76% chance of a rate cut within the next two months. Equities responded positively, with the S&P 500 and Nasdaq both posting gains. However, Bitcoin diverged from broader risk assets, showing signs of exhaustion after weeks of rally-driven speculation.
Resistance at $116K holds firm
Technical analysts point to heavy resistance at the $116,000 mark, which has acted as a psychological and algorithmic ceiling in recent sessions. “We’ve seen multiple attempts to push higher, but the volume simply isn’t there,” said a senior crypto strategist at a London-based asset manager. Several large sell orders were triggered near the resistance zone, causing a cascade of liquidations and pushing the price down towards $110,000 before stabilising slightly.
Market sentiment split despite macro tailwinds
Although falling interest rates typically support non-yielding assets like Bitcoin, some traders remain cautious amid growing uncertainty in the altcoin space and regulatory overhang in the US. A recent uptick in Bitcoin dominance—now near 54%—suggests capital is consolidating around core assets, though the absence of fresh institutional inflows has limited upside potential. On-chain data also shows a drop in active wallet addresses, indicating reduced retail engagement.
Fed narrative supports long-term outlook
Despite the pullback, macro fundamentals remain supportive over the medium term. A sustained rate-cutting cycle in the US could weaken the dollar and boost alternative stores of value. Bitcoin has historically performed well in easing cycles, and some analysts maintain bullish targets above $130,000 by year-end, provided macro volatility does not derail risk markets. However, the near-term technical setup remains fragile.
Volatility expected to remain elevated
With spot Bitcoin ETFs now deeply embedded in the trading landscape, large swings are increasingly driven by institutional flows and derivatives activity. Volatility may rise ahead of next week’s US inflation print, which could shape short-term Fed policy expectations. For now, bulls appear hesitant, and the $116K ceiling looms large as a key barrier to sustained upside.
REFH – Newshub, 2 August 2025
Recent Comments