Bitcoin experienced a rapid decline yesterday afternoon, dropping $3,000 from $98,500, causing many bulls to stop-loss and exit. It is currently fluctuating narrowly above $95,000, and although it has broken through $96,000 multiple times, it quickly fell back, with no clear trend yet.

Initial jobless claims fell below expectations

On the other hand, the U.S. Department of Labor released the latest data last night (26th), showing that for the week ending December 21, the number of initial jobless claims in the U.S., seasonally adjusted, fell to 219,000, a decrease of 1,000 from the previous week, and lower than 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 Fed may not further cut interest rates.

At the same time, the overall unemployment rate in the U.S. is currently 4.2%. Looking at the data from the past decade, although the labor market is trending towards weakness, the unemployment situation remains relatively mild, showing no signs of deterioration. Jefferies economist Thomas Simons also stated:

Although hiring speed has slowed, the pace of layoffs and firings has not accelerated, reflecting companies' increased emphasis 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: Risk of U.S. economic recession has decreased

Last night, after the U.S. employment data was released, the U.S. stock market and Bitcoin did not show significant reactions. As 2024 is about to end, inflation in the U.S. has almost returned to pre-pandemic levels, and the economy continues to grow while the labor market shows 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 policies that newly elected President Trump 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 are no interest rate cuts in January next year, it may not be good news for the U.S. stock market 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, and BTC has reached escape velocity, meaning there will no longer be large-scale retreats.

In 2013, there were concerns about whether regulators would ban Bitcoin. The situation in 2024 is completely different; Bitcoin has reached escape velocity.