Bitcoin has fallen more than 5% since hitting a peak above $102,000 on Monday. The drop pushed Bitcoin prices to a low of around $96,200, and the asset has struggled to recover as it continued to hover near that level for hours after the drop.
The revision marks a challenging start to 2025, as markets react to rising U.S. job gains and the Federal Reserve's stance on interest rates. The report from the Joint Employment and Labor Change (JOLTS) showed that employment rose to 8.1 million in November, up from an upwardly revised 7.8 million in October.
The strong labor market has dampened expectations for monetary policy easing, suggesting that rate cuts are no longer a pressing priority. This is also in line with the forecast from the CME FedWatch tool, which has a 95% chance that the Fed will leave interest rates unchanged at its meeting on January 29. Against this backdrop, the crypto market has reacted negatively, resulting in more than $559 million being liquidated in a sell-off, according to data from Coinglass.
The declines were not limited to Bitcoin but also spread across other major digital assets. Ethereum fell 8.6%, XRP lost 4.4%, Solana fell 8.5%, and Dogecoin fell 12% in the past 24 hours. The Pudgy Penguins token recorded the biggest decline, with a drop of 12.3%.
While the cryptocurrency market grew more than 11% in the first week of 2025, the recent downturn has erased nearly half of that growth.
Traders are now watching the impact of President Trump’s pro-crypto stance to see if it will affect market sentiment, although the impact of potential regulatory changes remains unclear.
Bitcoin Investors on Binance Hint at Accumulation
Burak Kesmeci, a CryptoQuant analyst, pointed out that the 14-day simple moving average (SMA14) that tracks net inflows on Binance has turned negative. Whenever the SMA14 turns negative, the price of Bitcoin (BTC) tends to move up.
In addition, Bitcoin outflows from Binance reached a monthly high, with 5,407 BTC withdrawn from the exchange. According to Kesmeci, this movement, combined with large outflows, suggests that investors on Binance are accumulating BTC.
“These indicators all confirm that investor behavior on Binance is leaning towards accumulating Bitcoin. This is a strong signal supporting the possibility of Bitcoin price increasing in the short term.”
Along with the move from Binance traders, U.S. retail investors have also shown a clear recovery in buying pressure, after the Coinbase premium index turned positive in early 2025. The index has now crossed above the SMA14, a strong bullish sign. Historically, whenever the index crosses the SMA14, Bitcoin prices have typically seen strong growth, as seen during the rally from $69,000 to $108,000 in Q4 2024.
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