Author: CryptoSlate

Translation: Shenchao TechFlow

Shenchao Introduction: Bitcoin has just rebounded 11% from a 21-month low, but the basis for this surge is solely a weak employment report. The minutes from the Federal Reserve's meeting on Wednesday will reveal whether officials are genuinely as concerned about an economic slowdown as the market expects; this document will determine whether the price can hold at $64,000 or drop back to $58,000.

Bitcoin rebounded from its 21-month low of July 1, rising 11%, but whether this uptrend can persist hinges entirely on the FOMC minutes to be released at 2 PM (Eastern Time) on Wednesday, covering the meeting on June 16-17.

Traders bought into this rebound based on a macro assumption: the weakening U.S. labor market limits the Federal Reserve's ability to maintain a hawkish stance. The minutes will be the first complete record of internal discussions since Kevin Warsh took over as chair, showing whether officials recognized the issue in mid-June, just weeks before the employment data sparked this rally.

This answer is crucial. On Tuesday, Bitcoin's trading price approached $64,000, up nearly 11% from the low of $58,000 set on July 1, with daily volatility exceeding $3,400, fluctuating dramatically between $61,250 and $64,659.

This rebound began with Thursday's U.S. employment report, showing that employers added only 57,000 jobs in June, about half of what economists had expected. The weak labor data prompted traders to cut bets on further rate hikes, with Bitcoin rising alongside gold and stocks; Barron's described this as a repricing of U.S. interest rates.

Bitcoin Market Repriced Before Seeing Fed's Reasoning

The June meeting gave almost no positive signals to the crypto market. Officials maintained the interest rate at 3.50%-3.75%, removed the language suggesting a potential rate cut soon, and adjusted the median forecast for 2026 to at least one more rate hike. Bitcoin fell to lows in the following two weeks as the market anticipated longer periods of tightening policy.

But the employment report changed everything. Aside from the overall data falling short of expectations, the Bureau of Labor Statistics (BLS) also downwardly revised the job numbers for April and May by a total of 74,000 jobs; the unemployment rate fell to 4.2% simply because about 720,000 people left the labor market, causing the labor force participation rate to drop to 61.5%.

The traders' reaction was to push back rate hike expectations: the CME FedWatch tool currently shows a roughly 76% probability that the Federal Reserve will keep rates unchanged at the July 28-29 meeting, and about 40% for a rate hike by December.

If Wednesday's minutes show that officials have been warning about a weak labor market, tight credit, or excessive tightening risks, the market's dovish turn will find support, and the rebound will have a foundation.

If the discussion focuses on persistent inflation and conditions for further rate hikes—in the same tone as Warsh has expressed publicly—then this upward trend will lose its main pillar. Bitcoin has already priced in substantial easing, so if the content of the document falls short of the market's dovish expectations, it would be enough to apply pressure on the price. The disappointment threshold is low because the rebound came too early.

One Day of Capital Inflow and 49,000 BTC New Supply on Exchanges

From an ETF perspective, this surge is equally fragile. The U.S. spot Bitcoin ETF attracted $223 million on Thursday, the largest single-day inflow since May, ending a 10-day streak of outflows totaling $2.73 billion.

This single-day stabilization has not reversed the trend: these products have lost nearly $8.5 billion since early May; institutional demand needs to flow in over consecutive days to make the outflows appear as entry opportunities in the data.

On-chain capital movements added further warning signals. When the price returned above $60,000, whale-sized exchange deposits reached about 49,000 BTC, increasing the supply that could be sold if prices rise after the release of the minutes.

Option positions are concentrated in the same area, with market makers' gamma values clustered around $60,000 and $62,000; these levels could lock in prices or accelerate declines, depending on the breakout direction.

Holding the $62,000 range after the minutes are released will keep the rebound intact, while breaking above Monday's high near $64,700 will confirm the rebound. Falling back to $58,000 would signify that the employment data-driven rebound is a failed bear market rally, occurring since the bear market began at the historical high of $126,198 in October last year.

Bitcoin's 11% rebound is built on speculation about what Federal Reserve officials discussed behind closed doors three weeks ago. The meeting records released on Wednesday afternoon will replace the speculation, and the difference between the two will determine the price direction.