Bitcoin saw a sharp swing after robust U.S. jobs data undermined expectations of Federal Reserve interest rate cuts and sent stock markets spiraling.
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The price of bitcoin fell to around $92,000 per bitcoin, reigniting a selloff that petered out earlier this week amid fears of a looming crash in bitcoin prices.
Today, as Tesla billionaire Elon Musk issues a surprise warning on the price of Bitcoin, crypto traders are scrambling to assess what the latest changes to Fed rate cut expectations mean for the Bitcoin price.
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The market is lowering its expectations for Federal Reserve Chairman Jerome Powell’s interest rate cut. … (+)
“Bitcoin’s decline below $93,000 highlights the growing influence of macroeconomic conditions,” Ryze Labs analysts wrote in an emailed note. “Liquidations totaled more than $1 billion this week, with long positions accounting for the majority as traders were forced to unwind their leveraged bets.”
The U.S. economy added 256,000 jobs in December, the largest monthly increase since March, beating expectations for 155,000 new jobs. The unemployment rate fell to 4.1%.
The latest data strengthened the Federal Reserve’s case for holding interest rates on hold after cutting them by one percentage point through 2024, with traders previously betting the interest rate would continue to fall until in 2025.
Expectations of higher and longer U.S. interest rates have also pushed bond yields sharply higher, with the 10-year U.S. Treasury yield hitting its highest level since late 2023 and weighing on stocks as the lure of higher yields higher on bonds makes stocks and risky assets higher. like bitcoin and crypto being less attractive.
“There is a risk that bitcoin could fall below $92,000 again, which could worsen bitcoin’s technical sentiment and the price could extend its loss to $80,000,” said market analyst Yuya Hasegawa bitcoin and crypto at Tokyo-based Bitbank in emailed comments. .
“This week saw an aggressive sell-off in the price of bitcoin, dropping from a high of $103,000 to $91,500,” John Glover, chief investment officer of crypto lending platform Ledn, said in comments sent via email, adding that there could be a drop between $80,000 and $85,000. if support above $90,000 fails.
While many Bitcoin and crypto traders are nervously watching the near-term outlook for the Bitcoin price and crypto market, others are confident that a downturn will be short-lived.
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The price of Bitcoin has fallen from its recent high, but remains much higher than it was before. … (+)
“With just ten days until President Donald Trump’s inauguration, volatility will likely persist in the markets,” Ryze analysts said, adding: “Despite near-term challenges, bitcoin’s structural factors, such as Institutional adoption and increasing integration into the global financial system, continue to support a bullish outlook for 2025.”
Others, however, remained optimistic following the latest US economic data, predicting that the outlook could increase the price of Bitcoin.
“This favorable economic backdrop provides a significant tailwind for bitcoin, which tends to thrive in an environment of growing investor confidence,” Matt Mena, crypto research strategist at Bitcoin and crypto investment firm 21Shares, said in comments. comments sent by email, highlighting “market sentiment.” firmly in risk mode,” which could position Bitcoin for “further price discovery” in the coming weeks.
“In particular, the strong jobs report could provide the momentum needed to break through the $100,000 level again and surpass the all-time high of $108,000, two critical psychological barriers that have recently capped bitcoin’s gains. “
