- Bitcoin loses $100K level after strong U.S. economic reports.
- $300M liquidations occur across crypto markets, mainly long positions.
- U.S. job openings rise unexpectedly, altering rate cut expectations.
A surge in U.S. job openings and a robust Services PMI report caused Bitcoin to dip below $98K, ending its recent rally. The unexpected data led to widespread liquidations in the crypto market, dampening rate cut hopes.
Bitcoin Dips amid massive liquidations
Bitcoin’s price fell below $98,000 after strong U.S. economic data led to massive crypto market liquidations. The decline was caused by higher-than-expected job openings and an optimistic ISM Services PMI report. These developments crashed the expectations of investors for more interest rate cuts, thus affecting Bitcoin and altcoins.
Bitcoin briefly rose and traded at around $101,000 then dropped to below $98,000 after the data was released. This marked a 4% decline within 24 hours. Other major cryptocurrencies such as Ethereum, Solana and Avalanche also dropped and recorded 6% to 9% in losses.
Liquidations surpassed $300 million across the crypto derivatives market as leveraged long positions were closed quickly. More than $230 million occurred in the last 4 hours of trading. According to CoinGlass, long positions account for approximately $212 million of the total liquidations.
Stock Markets Correlation with Bitcoin reemerges
The U.S Bureau of Labor Statistics reported a sudden increase in job vacancies to 8.1 million in November. The figure surpassed the 7.7 million which was expected by most analysts. At the same time, the ISM Services PMI for December and November was above expectations at 52.1 at 54.1 respectively.
The stronger-than-expected data further raised concerns in the bond market which caused a 4.68% rise in the 10-year U.S. Treasury yield. The stock market also declined with the Nasdaq falling more than 1% and the S&P 500 down by 0.4%. The bond market’s reaction to the data caused a rapid drop in risk assets like cryptocurrencies.
Impact of macroeconomic factors on Bitcoin market
The newly released U.S economic data has forced market participants to revise their expectations about the Federal rate cuts. Although there was no rate cut anticipated in January, markets have lowered the probability of federal interest rate cuts in March. Additionally, the potential of lower rates in May has dropped to below 50%.
Market correction also aligns with the strict Fed’s monetary policy which has reduced the appeal of digital assets. Bitcoin and other digital cryptocurrencies witnessed a significant growth last year as the cost of borrowing declined. However, the expectations for future rate cuts have faded which has led to further correction in prices for various assets.
Bitcoin’s recent price fluctuation underscores the increased volatility of cryptocurrency markets. Market participants are now revising their expectations for 2025 especially on the possibility of potential rate cuts. The rapid liquidation and price correction further emphasize the volatility of the digital asset market.