Bitcoin Falls Below $98K After Strong U.S. Economic Data Triggers $300M in Crypto Liquidations

Bitcoin Dips Below $98K

Bitcoin (BTC) fell below $98,000 early Tuesday after U.S. economic data exceeded expectations, shifting market sentiment. This caused Bitcoin to erase previous gains, leading to fears of fewer rate cuts this year.

Surprise Rise in Job Openings
The Bureau of Labor Statistics revealed that November’s job openings unexpectedly rose to 8.1 million, surpassing forecasts of 7.7 million. Bitcoin, previously hovering around $101,000, dropped to $97,800, marking a 4% decline in 24 hours.

Altcoins See Larger Losses
Major altcoins such as Ethereum (ETH) and Solana (SOL) declined by 6%-7%. Avalanche (AVAX) and Chainlink (LINK) dropped even more, falling by 8%-9%. Nearly $300 million in long positions were liquidated in the derivatives markets.

ISM Services PMI Exceeds Expectations
The ISM Services PMI for December came in at 54.1, above the expected 53.3 and November’s 52.1. The Prices Paid subindex hit 64.4, indicating higher inflation pressures than anticipated.

Rising U.S. Bond Yields Add Pressure
The strong economic data put pressure on the bond market, pushing the 10-year U.S. Treasury yield to 4.68%. U.S. stocks followed suit, with the Nasdaq down over 1% and the S&P 500 lower by 0.4%.

Reduced Expectations for Rate Cuts in 2025

With fewer rate cuts expected in 2025, the chances of a rate cut in March dropped from nearly 50% to 37%. Expectations for May also fell, with investors now anticipating only one 25 basis point reduction for the entire year.

Impact on Market Confidence
This shift in expectations has caused a ripple effect across both traditional and digital asset markets, impacting investor confidence.

What You Need to Know: Bitcoin Drops Over 4% as U.S. Economic Data Sparks Market Shift

• Bitcoin (BTC) declined by more than 4%, while major altcoins like Ethereum (ETH) and Solana (SOL) fell 6%-9%.
• The price drop was triggered by higher-than-expected U.S. economic data, which caused U.S. bond yields to hit renewed cycle highs.
• Investors are reducing expectations for future Federal Reserve rate cuts, now forecasting only one rate reduction throughout the entire year.