Gate Daily: Bitcoin breaks through the 110,000 USD barrier! Trump sends signals on tariff rates, non-farm payrolls weaken rate cut expectations.

Today (5) in the Asian early session, Bitcoin slightly retreated to around 109,600 USD after breaking through the 110,000 USD mark last night. U.S. President Trump stated that he may announce new tariff rates to various countries starting Friday local time. The June non-farm payroll data was stronger than expected, boosting market sentiment and weakening expectations for a rate cut by The Federal Reserve (FED), leading to a slight rise in the dollar, which suppressed buying interest in Crypto Assets.

According to Bloomberg, Trump stated that his administration may begin sending letters to trade partners as early as Friday to set unilateral tariff rates ahead of the July 9 negotiation deadline.

Trump said to reporters on Thursday, before leaving Washington for Iowa to attend an event: "We might start sending out some letters to various countries starting tomorrow, probably about 10 a day, stating how much they are willing to pay to do business with the United States."

Trump has long threatened that if countries fail to reach an agreement with the United States before next week's deadline, he will impose tariffs on those nations, increasing the risk for trade partners eager to strike a deal with his administration.

The U.S. President initially announced an increase in the so-called "reciprocal" tariffs on April 2, but suspended them for 90 days to allow countries time to negotiate, during which a 10% tariff was implemented.

On Thursday, when asked if more agreements would be reached, Trump replied, "We have a few other agreements, but you know, I tend to issue a letter explaining what tariffs they will pay. It's much easier."

A new trade agreement reached between the United States and Vietnam before the July 9 tariff deadline helps to ease investors' tensions. The United States has agreed to lower tariff pressures in exchange for greater market access for U.S. goods. The agreement includes a 20% tariff on goods exported from Vietnam and a 40% tariff on goods shipped from a third country through Vietnam. In return, Vietnam will lower barriers for U.S. goods, allowing certain American products to enter the U.S. market duty-free. The tax rates in the agreement are lower than the initially proposed unified tariff of 46%, helping to alleviate trade tensions.

As the July 9 deadline approaches, the United States is urging key allies including Japan, South Korea, and the European Union to finalize trade agreements, or face high new tariffs, with reports indicating that certain imported products could see tariffs as high as 50%. While some negotiations have made progress, others remain uncertain. Japan has firmly pushed back, with Prime Minister Shio Abe stating that Tokyo "will protect national interests at all costs," indicating its resistance to Washington's demands. Meanwhile, South Korean President Lee Jae-myung stated on Thursday that negotiations appear difficult, and he cannot be certain if they will conclude by next Tuesday. German officials have urged swift action to avoid disruptions to critical export sectors. The looming tariff threat has heightened global trade anxiety and kept markets on edge.

This week, the "One Big Beautiful Bill" covering taxes and spending passed the House of Representatives, but due to increasing divisions within the Republican Party, the bill remains in an unstable state. Although the bill barely passed a crucial procedural hurdle with a narrow advantage of 219 votes in favor and 213 votes against, some Republican lawmakers expressed concerns about significant cuts in spending, the rising deficit, and potential negative impacts ahead of the November elections. Despite President Trump's immense pressure to pass the bill quickly to complete it before July 4th, opposition from fiscal conservatives could delay or hinder final approval. As of the time of publication, the House is still debating the bill, and investors are closely monitoring its outcome given its potential impact on the level of federal debt and overall market sentiment.

The non-farm employment data for June is strong, with initial jobless claims dropping to 233,000 last week, the lowest level in six weeks and below the expected 240,000, highlighting the continued strength of the labor market. At the same time, average hourly earnings in June grew by 0.2%, slightly below the expected 0.3%, indicating a decrease in wage pressure. Although the lower-than-expected income has alleviated inflation concerns, the overall resilience of the employment data has reduced the urgency for the Federal Reserve to cut rates in July and has helped the dollar to rebound.

In June, the US Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) rose to 50.8, slightly above the market expectation of 50.5, and higher than May's 49.9. This improvement indicates that, driven by enhanced business activity, the US services sector is reopening for expansion. The new orders index surged to 51.3, and the business activity index rose to 54.2. Although the employment index remains in a contraction state at 47.2, the overall rebound shows that service sector demand remains stable.

Rafael Bostic, the president of the Atlanta Federal Reserve Bank, pointed out at an economic conference held in Germany: "The adjustments of prices and the overall economy to changes in trade and other forthcoming policies... will not be just a brief and simple one-time price movement as standard textbook models suggest."

He added that this could "become a process that may take a year or longer to complete fully," potentially fully addressing consumer inflation. Given that labor market data still shows resilience, Bostic warned against rushing to ease policies, stating that the overall labor market conditions remain healthy, and current indicators have not shown signs of deterioration that might necessitate preemptive interest rate cuts.

Crypto Assets Circle Focus Events:

U.S. Senator Lummis Drafts Independent Encryption Tax Bill

U.S. Senator Cynthia Lummis submitted a draft bill on Thursday outlining several provisions to reform the tax code, and exempting certain digital asset transactions from taxation after the crypto assets amendment failed to appear in the budget proposal.

The bill proposes a minimum tax exemption for digital asset transactions and capital gains of $300 or less, with an annual tax exemption limit of $5,000.

The Wyoming senator also outlined provisions for tax exemption on crypto assets used for charitable donations and agreements for cryptocurrency lending. Additionally, the bill proposes to delay the taxation of mining and staking rewards until after the related assets are sold.

Lummis stated: This groundbreaking legislation has received full funding, simplified cumbersome bureaucratic procedures, and established common-sense rules that reflect how digital technology operates in the real world. We cannot allow outdated tax policies to stifle innovation in the United States.

Crypto Assets theft activities utilize wallet cloning attacks on Firefox users

A report released on Wednesday by the cybersecurity company Koi Security showed that over 40 popular web browsers' Mozilla Firefox fake extensions are related to ongoing malware activities that steal crypto assets.

According to reports, this large-scale phishing operation deployed browser extensions impersonating multiple wallet tools. Once installed, these malicious extensions will steal users' wallet credentials.

The company stated: "So far, we have been able to connect more than 40 different extensions to this event, which is still ongoing and very active."

Koi Security stated that the attack activity has been active since at least April, with the latest extensions uploaded last week. According to reports, these extensions extract wallet credentials directly from the target website and upload them to a remote server controlled by the attackers.

Ripple applies for a banking license in the United States, joining the competition for the legalization of Crypto Assets

The crypto assets company Ripple Labs is applying for a banking license in the United States, following a similar move by stablecoin issuer Circle Internet Group, as crypto assets companies seek regulation to deepen their ties with traditional finance.

Ripple CEO Brad Garlinghouse stated on X (formerly Twitter) on Wednesday that the company is applying for a license from the Office of the Comptroller of the Currency (OCC), confirming an earlier report by The Wall Street Journal (WSJ).

Bitcoin Technical Analysis

According to CoinTelegraph, due to multiple bearish divergences appearing over different time frames, crypto assets are facing a ceiling. On the 15-minute, 1-hour, and 4-hour charts, technical analysts have marked divergence signals, indicating that prices continue to rise while momentum indicators (such as the relative strength index) are trending lower. This suggests that bullish momentum is weakening, thereby increasing the risk of a recent pullback.

(Source: Trading View)

Zooming into the daily chart further reinforces cautious expectations. In May, there was a clear bearish divergence between the price and momentum indicators, consistent with Bitcoin's historical high of $111,800. Although BTC briefly fell below $100,000 thereafter, the divergence remains, indicating that potential bearish pressure may still be at play. The short-term target below remains between $107,500 and $106,000.

Vetle Lunde from K33 Research pointed out in an article on X that even as the BTC price approaches historical highs, the funding rates for perpetual futures remain stable. This lack of aggressive long positions indicates that traders may not fully believe in Bitcoin's sustained breakout, which aligns with the current technical divergence.

(Source: K33)