The job market is fluctuating, and a rate cut in September has become a consensus.

In the past week, there were mainly two events affecting the market: Trump's and Musk's arguments, and the US employment data. More sadly, these are all US issues. However, the US stock indices have been hitting new highs almost daily, while the cryptocurrency market has suffered, with Bitcoin repeatedly struggling to break previous highs. Many contract positions have been liquidated, which is why many investors in the cryptocurrency space prefer to trade US stocks recently.

The performance of the US stock market is due to expectations that the Federal Reserve will restart the interest rate cut cycle in September. Fortunately, Bitcoin was also able to break through $110,000 after the release of the small non-farm employment data, although there was some pullback over the weekend, but overall it still maintained the $108,000 level, temporarily preserving its upward momentum.

Currently, the biggest resistance on the daily chart is still $110,000. Since this price has been tested three times, if it cannot stabilize above $110,000 or set a new high, the risk of a short-term pullback to $106,000 or even $103,000 will gradually increase. The overall trend this month will depend on news and events from the US market.

The deadline for tariff negotiations has arrived; beware of sudden changes.

This week, the economic data to be announced in the US is less than last week. Attention should be paid to the release of the Federal Reserve's meeting minutes and unemployment figures on Thursday. Since the July interest rate meeting is at the end of the month, the Federal Reserve's meeting on Thursday will simply focus on the directors' views on the current economy, especially their stance on interest rate cuts. The latest unemployment figures will be released later that evening; hence, market volatility is expected to be relatively high.

Another key focus is the status of negotiations between various countries and the US before the July 9 tariff deadline, especially Trump's remarks. If there is another breakdown in negotiations with other countries, it could lead to turbulence in the stock and cryptocurrency markets. Starting Monday, the US will gradually announce different trade agreements; if everything goes smoothly, at least the US stock market will perform optimistically, as long as trade agreements with China, the EU, Japan, and other countries do not undergo significant changes.

This week, the market was originally concerned about tariff issues, but US Treasury Secretary Basent stated last night that if countries have not finalized tariff agreements by August, they will revert to the tariff levels of April 2. This is considered a tacit acceptance of extending tariff negotiations to the end of July, making the July 9 deadline less significant. Therefore, Bitcoin directly broke through $109,000 this morning.

However, this week it is still necessary to pay special attention to Trump's remarks regarding tariffs and Musk, as everyone has not yet deciphered his thoughts. If there are unexpected reactions, the market trend could turn sharply downward. But if Trump and Musk do not show serious opposition afterwards and tariff progress is good, we might see Bitcoin rise back above $110,000 this week, or even challenge new highs.

Short-term outlook (next few months)

Includes tax cuts and increased spending, which may stimulate the economy. This could push up stock prices in the coming months; the market has recently seen an upward trend, with the S&P 500 and Nasdaq indices hitting historical highs on July 3, 2025. For cryptocurrency, the total market value increased by 0.37% on July 4, 2025, which also drove Bitcoin to break through $110,000 for the third time, showing an initial positive response, possibly driven by economic stimulus measures.

Long-term outlook (2026 and beyond)

In the long term, the legislation is expected to increase the deficit by $2.8 trillion by 2034, leading to inflation, which may push up interest rates, slow economic growth, and negatively impact the stock market in 2026. For cryptocurrency, rising inflation may make Bitcoin a more attractive hedge, but given the current high correlation between the cryptocurrency market and the US stock market, higher interest rates may pose challenges for risk assets, bringing uncertainty.

"The big and beautiful" may bring a boost to the stock and cryptocurrency markets in the short term due to economic stimulus. Recent data also supports this statement. Coupled with the expectation of restarting the interest rate cut cycle, we can expect an optimistic market trend in the second half of 2025, with a high chance of new highs in both US stock indices and Bitcoin. However, by 2026, the stock market may face negative impacts due to rising deficits and interest rates, and cryptocurrency, which is highly correlated with the stock market, may face challenges due to economic slowdown and high rates, potentially entering a bear market.