The crypto market took a hit on Tuesday as Bitcoin (BTC) fell below the $100,000 mark. Stronger-than-expected U.S. economic data dampened optimism in digital assets, reversing recent gains.
The Bureau of Labor Statistics announced an unexpected increase in November job postings to 8.1 million, above expectations of 7.7 million.
Meanwhile, the ISM Services Purchasing Managers Index, which measures economic activity in the services sector, increased to 54.1 in December, up from 52.1 in November and beyond estimates of 53.3. A significant component of the survey, the Prices Paid subindex, rose to 64.4, indicating greater expenses.
These reports, although not usually major market movers, unsettled financial markets already sensitive to interest rate expectations. The yield on 10-year U.S. Treasury bonds rose to 4.68%, near multi-year highs, while U.S. stocks dipped. The Nasdaq fell over 1%, and the S&P 500 lost 0.4% in morning trading.
Bitcoin (BTC) fell from just under $101,000 to $96,600, losing 5% in 24 hours after the release of strong economic data. Other major cryptocurrencies saw sharper declines, with Ethereum (ETH) and Solana (SOL) dropping 6%–7%, while Avalanche (AVAX) and Chainlink (LINK) tumbled 8%–9%.
The price drop caused about $300 million in losses for traders who had bet on rising prices, marking the first significant market shakeup of the year, according to CoinGlass.
Investors no longer expect a rate cut in January. The chances of a rate cut in March have fallen to 37%, down from 50% last week, according to the CME FedWatch tool.
The odds of a rate cut in May are also less than 50%. Looking ahead to 2025, Kyle Chapman from the Ballinger Group said investors now expect only one small rate cut of 0.25% for the whole year.
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