Bitcoin (BTC) has surged to reclaim the $110,000 level for the first time since June 11, placing it within striking distance of its all-time high of $112,000 recorded on May 22. Despite this bullish price action, which saw BTC climb 1.75% in 24 hours to trade at $109,970.87 as of 4 p.m. ET Wednesday, Bitcoin's market dominance has seen a slight retreat. After peaking at over 66% on June 22, the metric, which measures BTC's market cap relative to the entire crypto market, now sits just above 65%, with Bitcoin's total market capitalization at a formidable $2.2 trillion. The market's immediate attention, however, is fixated on the impending U.S. jobs report, a critical macroeconomic event that could dictate the next major trend for digital assets.

Jobs Report Looms as Key Catalyst for BTC Price

The financial world is bracing for the U.S. nonfarm payrolls report, released a day early due to the July 4 holiday weekend. Market consensus anticipates an increase of 110,000 jobs last month, a notable slowdown from May’s 139,000 and the smallest gain in four months. Furthermore, the unemployment rate is projected to tick up to 4.3%, a level not seen since October 2021. This data point is particularly crucial as the unemployment rate has been tightly range-bound between 4.0% and 4.2% for the past year. A weaker-than-expected labor market could bolster the case for a Federal Reserve interest rate cut, with markets already pricing in a 75% probability that the Fed will hold rates at its July 30 meeting. Trading volumes are expected to be thin, with the NYSE and Nasdaq closing early at 1 p.m. ET.

On-Chain Data Suggests Market Poised for Volatility

According to analysis from HTX Research, the market is at a pivotal inflection point, navigating between two distinct scenarios dependent on the jobs data. “On-chain flows remain stable, suggesting that major players are awaiting further signals from this week’s Non-Farm Payrolls and Initial Jobless Claims data,” the research firm noted. A soft labor report could confirm a September rate cut, potentially igniting a new rally for BTC. Conversely, an unexpectedly strong report could see Bitcoin break below the key $104,000 support level, triggering a technical correction. This sentiment is echoed in derivatives data, where open interest in BTC perpetuals has broken out of a descending channel, signaling renewed appetite for leveraged positions that align with the spot price's ascent above $110,000.

Altcoin Market Rallies, Led by AI and Memecoins

While Bitcoin consolidates, the altcoin market is showing significant strength. The AI-focused token NEAR has been a standout performer, rallying 16.5% since July 1 to trade at $2.36. This surge was catalyzed by an announcement from fund manager Bitwise regarding the launch of a NEAR exchange-traded product (ETP) for institutional investors in Europe. The news caused NEAR's daily trading volume to double to $213 million. This move is part of a broader altcoin revival, as the CoinDesk DeFi Select Index rose 7.74% in the last 24 hours. The memecoin sector has been particularly vibrant, with its corresponding index jumping 13.2% in the same period. Solana-based tokens BONK and WIF led the charge, posting gains of 21% and 15%, respectively. This renewed interest in higher-risk assets suggests a shift in trader sentiment, potentially diverting some capital flow from Bitcoin and contributing to its slightly decreased dominance.

The derivatives market further illustrates this diverse interest. While BTC and XRP perpetual futures open interest has climbed over 5% in 24 hours, validating the spot rally, assets like DOGE, LTC, and XMR have seen the largest increases in open interest. Meanwhile, negative funding rates for TRX and BCH indicate a continuing bias for short positions. Spot ETF flows also paint a complex picture; according to Farside Investors, spot BTC ETFs saw net inflows of $407.8 million, while spot ETH ETFs experienced minor net outflows of $1.9 million. Crypto-related equities like MicroStrategy (MSTR) and Coinbase (COIN) closed Wednesday with significant gains but showed signs of cooling in pre-market trading, reflecting the market's cautious stance ahead of the crucial economic data release.