Warnings of a tough January
Many analysts have warned crypto traders that they are facing a challenging January, with headwinds including a hawkish Federal Reserve, a rapid rise in long-term government bond yields, high inflation readings, and the possibility of a U.S. government shutdown.
What sparked the selloff across all assets was strong economic data released on Tuesday, which prompted investors to scale back their expectations for interest rate cuts this year. The collapse led to the liquidation of nearly $1 billion in leveraged derivatives positions on crypto assets, most of which were long positions that were betting on higher prices, according to Coinglass data. The drop also temporarily pushed bitcoin below its level at the start of the year. Bitcoin fell significantly in the last hours of trading on Thursday, erasing all of its gains from early 2025, as a selloff in crypto prices accelerated due to macroeconomic concerns and the global bond crisis.
The largest digital currency fell to a session low of $92,600 during U.S. trading hours, down about 10% in two days from its peak of more than $102,000 on Monday.$BTC