#BinanceMegadropSolv

Bitcoin falls below $98,000 as solid economic data from the U.S. triggers $300 million in cryptocurrency liquidations. Stronger-than-expected job vacancies and the ISM services PMI reduced investors' expectations for new rate cuts this year.



What to know:

  • Bitcoin (BTC) fell more than 4% and major altcoins, including ETH and SOL, fell between 6% and 9%.

  • Behind this move were renewed cycle highs in U.S. bond yields following stronger-than-expected economic data.

  • Investors continued to reduce their hopes for new rate cuts from the Federal Reserve, now only considering that there will be a rate reduction for the entire year.

Cryptocurrency markets stumbled and Bitcoin (BTC) lost the $100,000 level on Tuesday morning in the U.S., as two stronger-than-expected U.S. economic data threw cold water on the bright early-year momentum of digital assets.

The JOLTS job openings from the Bureau of Labor Statistics for November unexpectedly rose to 8.1 million from 7.8 million the previous month, easily surpassing analysts' estimates of a decline to 7.7 million.

The ISM services purchasing managers' index, released at the same time and measures monthly economic activity in the sector, stood at 54.1 in December, exceeding expectations of 53.3 and well ahead of November's 52.1. The prices paid sub-index was at a very high level, at 64.4, compared to the expected 57.5 and 58.2 for the previous month.

Although neither of the two reports is usually a major market driver, together they further shook an already nervous bond market, causing the yield on the 10-year U.S. Treasury bond to rise another five basis points to 4.68%, just inches away from multi-year highs. The move caused U.S. stocks to fall: the Nasdaq was now down more than 1% in late morning trading and the S&P 500 was down 0.4%.

BTC, which was trading just below $101,000 during the European afternoon, fell to $97,800 after the data, giving up yesterday's gains and down 4% in the last 24 hours. Major altcoins fell even more: Ethereum's ether (ETH) and Solana's SOL lost between 6% and 7%, while Avalanche's AVAX and Chainlink's LINK fell between 8% and 9%.

The rapid drop in prices liquidated nearly $300 million in long positions in derivative markets betting on price increases, according to CoinGlass, marking the first major wave of leverage this year.


The strong data also caused investors to further reduce their expectations for rate cuts in 2025.

While market participants had already ruled out any possibility of a rate cut at the Fed's January meeting, they now see only a 37% chance of a loosening measure at the central bank's March meeting, down from nearly 50% just a week ago, according to the CME FedWatch tool. Looking even further ahead, the odds of a rate cut in May are also now well below 50%. Analyzing the entire year of 2025, Kyle Chapman from Ballinger Group noted that investors are now only pricing in approximately a 25 basis point rate cut for the entire year.

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