The Fourth of July celebration at the Smithsonian's Museum of History and Technology is a celebration in the truest American style. The four-day affair concluding tomorrow's a controlled melee of entertainments, as colorful and spontaneous as a fireworks display.

In booths along the museum's concourses, women seated at Singer sewing machines stitch revolutionary banners (and give sample stars away to children), and a pleasant-looking man in a T-shirt turns himself into a sad-faced clown, to demonstrate the art of circus make-up.

The exhibition halls echo with the thunder of drums and the whistle of fifes, issued smartly by a troop of youngsters in revoluntary attire. In the midst of visitors viewing some of the museum's permanent exhibits, a quartet of "Sweet Adelines" breaks unexpectedly into a spirited barbershop number, and soon draws a small crowd. The four ladies harmonize through three selections, accept their applause, and move off, to find a new spot for their precipitous concertizing.

"The Irish Breakdown," whose name symbolizes their mixed repertoire of Irish and ("Foggy Mountain Breakdown") bluegrass folksongs, is among the most popular features. The "Breakdown" consists of three native Irishmen, now Washington-area residents, and an upstate-New Yorker. Accustomed to playing pubs, they were a little self-conscious in the relative soberness of the Museum. But, against the competition of the fife and drum troop and a small concert band, they drew a good-sized, foot-tapping crowd.

Their fiddler, a compact, blond fellow named Brendan, says that much of American bluegrass has its roost in music brought over from Ireland and Scotland with the early settlers.

Plucking constantly at his instrument while he talked, Brendan tired to explain the differences in fiddling styles between Irish and American folk music - Bluegrass has a lot of chord-work. Irish fiddling is more melodic. He learned to play "mostly from my father, and taking it up from other people. Its the only way to do it."

He went off to join his friends in a song about a man who tries to sell his fiddle to buy a bottle of wine. Among the audience, awash in the pathos of the tenor's sad Irish lament, was a small Oriental girl, gripping a Snoopy shoulder bag in one hand, and a souvenir star from a copy of John Paul Jones's battle flag in the other.