Bitcoin plummeted by $6000 due to the negative impact of ISM Non-Manufacturing PMI and JOLTs job vacancy data.
Last night, U.S. employment data was better than expected, with service sector inflation accelerating. In November, U.S. JOLTS job vacancies unexpectedly increased by 259,000, reaching 8.098 million. ISM Non-Manufacturing PMI rose from 52.1 in November to 54.1, and the price index rose from 58.2 in November to 64.4, hitting an 11-month high, indicating that inflationary pressures still exist.
Two data points have lowered market expectations for interest rate cuts, mainly due to reduced chances of cuts before July and a contradiction to previous expectations of 2-4 cuts in 2025. The market expects over a 95% chance that the Federal Reserve will not cut rates in January, leading to a sharp drop in Bitcoin.
Bitcoin's trading volume during the past week of rising prices has been relatively low, indicating that buying pressure is not strong, making the market relatively fragile and susceptible to external influences. Yesterday's bearish candle not only engulfed the bullish candle from January 6 but also had a trading volume greater than January 6, indicating that selling pressure currently dominates, and further declines are quite likely.
The current question is whether it will fall below last month's low point of 91500 on the 30th.
Currently, the value of Bitcoin STH RP is 87645, and the trading volume during last night's drop was quite large, with selling pressure noticeably increasing. Therefore, we cannot rule out the possibility of falling below 91500 and finding support at STH RP.
Next, we need to observe the changes in trading volume if the decline continues. If the trading volume significantly decreases during further declines, it indicates that selling pressure is weakening, reducing the chances of breaking below 91500.
If the trading volume remains large during further declines, it indicates that selling pressure continues to be strong, increasing the likelihood of falling below 91500.
Many fans are asking if there will be any local surges next.
To determine whether there will be a surge, we look at two points:
(1) Trump's policies
(2) Expectations of interest rate cuts.
Trump's policies have been difficult to implement in recent months, so we should just focus on interest rate cut expectations. A significant decline in rate cut expectations in March will cause Bitcoin altcoins to drop; and vice versa.
If the probability is ambiguous, hovering between 40-60%, then the market is oscillating. In oscillation, one must be prepared for fluctuations; if decent profits are made, they should be taken, and one cannot be overly ambitious.
After last night's data release, the probability of a rate cut in March dropped to four levels, while the probability in May remained around five levels. Moreover, Bitcoin has rebounded for eight consecutive days, making a pullback very normal; however, Bitcoin is still only oscillating. Unless the probability of a rate cut in March falls below 20%, there is a possibility of approaching or even breaking below 91500.
Next, we will focus on the two sets of economic data on the 10th and 15th, as well as the speeches after the FOMC meeting on the 29th to judge how the market will move.
