Bitcoin experienced a rapid drop yesterday afternoon, plummeting $3,000 from $98,500, causing many bulls to hit stop-loss orders. It is currently oscillating narrowly above $95,000, although it has repeatedly broken through $96,000, it quickly fell back, and there is still no clear trend.
Initial unemployment claims were lower than expected.
On the other hand, the U.S. Department of Labor announced the latest data last night (26th) showing that for the week ending December 21, the number of initial unemployment claims fell to 219,000, a decrease of 1,000 from the previous week and below the market expectation of 224,000, marking the lowest level in nearly a month. This indicates that although the labor market is cooling, companies are still avoiding large-scale layoffs, suggesting that the Federal Reserve may not further cut interest rates.
At the same time, the overall unemployment rate in the U.S. is currently 4.2%. Based on data from the past decade, although the labor market is trending weak, the unemployment situation is relatively mild, with no signs of deterioration. Jefferies economist Thomas Simons also stated:
Although the hiring pace has slowed, layoffs and firings have not increased at the same rate, reflecting the importance that companies place on retaining scarce labor.
The probability of the Fed pausing interest rate cuts in January is as high as 91.4%.
According to the CME FedWatch tool, the current market expects the U.S. Federal Reserve to pause interest rate cuts in January next year, with a 91.4% probability that the federal benchmark interest rate will remain unchanged in the current range of 4.25% to 4.5%, consistent with predictions from a week ago.
Economists: The risk of U.S. economic recession has decreased.
After the U.S. employment data was released last night, the U.S. stock market and Bitcoin did not react significantly. As 2024 is about to end, U.S. inflation is almost back to pre-pandemic levels, and the economy continues to grow, with the labor market still showing resilience. Therefore, economists expect that the risk of a U.S. economic recession will decrease, and a soft landing is possible.
However, it is worth noting that a significant uncertainty factor for next year may be the tariff policy that President Trump, if elected, might implement. Goldman Sachs chief economist Jan Hatzius and others pointed out:
The biggest risk is large-scale comprehensive tariffs, which could severely impact economic growth.
Pantera founder: Bitcoin has reached escape velocity.
If there is no interest rate cut in January next year, it may not be good news for U.S. stocks and Bitcoin. However, regarding the long-term trend of Bitcoin, Pantera founder Dan Morehead recently stated in an interview that in 2024, Bitcoin has shown a completely different situation compared to before, as BTC has reached escape velocity and will not experience large-scale regression.
In 2013, there were concerns about whether regulators would ban Bitcoin. The situation in 2024 is completely different; Bitcoin has reached escape velocity.