Bitcoin Falls Below $98K as Hot U.S. Economic Data Shakes Rate Cut Hopes
Bitcoin (BTC) dipped under the $100,000 threshold on Tuesday as unexpectedly strong U.S. economic reports spurred fears of prolonged monetary tightening, triggering a broad sell-off across cryptocurrency markets.
The November JOLTS report revealed job openings climbing to 8.1 million, surpassing expectations for a decline to 7.7 million. Meanwhile, December’s ISM Services PMI rose to 54.1, beating both the forecasted 53.3 and November’s 52.1. The Prices Paid subindex soared to 64.4, signaling persistent inflationary pressures.
The data fueled a jump in the 10-year U.S. Treasury yield, which rose to 4.68%, nearing multi-year highs, and pressured equities, with the Nasdaq shedding over 1% and the S&P 500 falling 0.4%. Bitcoin, trading above $101,000 earlier in the day, plunged to $97,800—a 4% decline over 24 hours. Ethereum (ETH) and Solana (SOL) saw steeper losses of 6%-7%, while Avalanche (AVAX) and Chainlink (LINK) dropped nearly 9%.
The sharp downturn triggered liquidations of nearly $300 million in leveraged long positions across crypto futures markets, according to CoinGlass.
The robust economic data prompted investors to reevaluate the likelihood of rate cuts in 2025. The CME FedWatch tool now shows just a 37% chance of a rate cut at the Federal Reserve’s March meeting, down from 50% a week ago. Expectations for broader easing throughout the year have also diminished, with markets pricing in only one 25-basis-point cut by year-end.
“Bitcoin’s recent rally was heavily reliant on macro tailwinds and optimism about rate cuts,” said Sarah Klein, a crypto market strategist at Arbor Research. “With stronger-than-expected data fueling rate hike fears, we could see further pressure on bitcoin if Treasury yields continue to climb.”
As the crypto market enters a more volatile phase, analysts advise traders to keep an eye on macroeconomic signals, as bitcoin’s short-term movements remain tied to shifts in investor sentiment around U.S. monetary policy.
