Bitcoin plummeted when JPMorgan Chase re-evaluated its expectations for U.S. interest rates. The bank no longer projects a Federal Reserve rate reduction in 2026, and low U.S. job data affected this change. The expectations in the market transformed rapidly, and risk assets came under pressure.
JPMorgan already anticipated a 25-basis-point reduction in January 2026. The bank is now forecasting that rates will stay constant throughout the year. It also estimates growth in rates in 2027. The new position has added additional pressure to the short-term trend of Bitcoin.
Job Market Slowdown Resets Expectations for Fed Rate Cuts
The revision was in line with lighter US jobs data. The nonfarm payrolls, JOLTS, and the rate of unemployment were lower than anticipated. These readings indicated a lower economic performance. Before the announcement of the new data, JPMorgan had anticipated increased hiring and business spending.
Other leading banks also shifted their expectations. Barclays, Goldman Sachs, and Morgan Stanley postponed their forecasts on reducing the rates. Goldman Sachs is currently anticipating two reductions in mid-2026. Its previous expectations indicated a previous relaxation cycle. According to the CME FedWatch Tool, there is a 95% probability of no change in rate in January.
Also Read: Bitcoin (BTC) Trapped in $85K–$94K Range as Macro Pressure Limits Breakout
Bitcoin Slips as Volatility Rises Ahead of Key CPI Data
As of press time, Bitcoin was trading at $90,752. The price declined by 0.23% in the past 24 hours. The trading volume is showing a strong bullish surge up, 149.76% to $31.51 billion. The token has also dropped 2.24% over the last week. The relocation coincided with overall changes in rate expectations.
Source: CoinMarketCap
Attention will now turn to the next CPI inflation data. A bullish move would bring Bitcoin to the CME gap around $88,000. Liquidity concerns are very high. Spot Bitcoin ETFs continue to face redemptions. These outflows have been weighing on market sentiment.
In JPMorgan’s latest view, more macro risk is out there. Investors are keeping an eye on upcoming economic data. Expectations of Fed decisions will be shaped by future U.S. data. Even these rate change projections could influence the way Bitcoin is traded in the next couple of months.
Also Read: JP Morgan Extends JPM Coin to Canton Network in Major Blockchain Expansion
