U.S. economic data impacts market and interest rate expectations, Bitcoin outlook draws attention

The "Job Openings and Labor Turnover Survey" released by the U.S. Department of Labor on the 7th shows that job vacancies at the end of November 2024 rose by 259,000 from the revised value of 7.839 million in the previous month to 8.098 million, reaching a new high in six months. Meanwhile, the ISM Non-Manufacturing Index for the U.S. rose from 52.1 in November to 54.1 in December last year, exceeding economists' expectations and remaining above the neutral line of 50, indicating continued expansion of the overall economy.

As a result, U.S. Treasury yields surged towards 5%, and all four major U.S. indices declined, with the Dow Jones Industrial Average dropping 0.42% (178.2 points) to close at 42,528.36 points; the Nasdaq Composite fell 1.89% (375.3 points) to close at 19,489.68 points; the S&P 500 dropped 1.11% (66.35 points) to close at 5,909.03 points; and the Philadelphia Semiconductor Index fell 1.84% (97.9 points) to close at 5,212.24 points. Among them, tech stocks led the declines, with Nvidia closing down sharply by 6.2%.

In the Bitcoin market, Bitcoin fell sharply after the U.S. stock market opened last night, hitting a low of $96,176 around 4 a.m., and reported at $96,916 before the deadline, down 4.7% in the past 24 hours; Ethereum experienced a more significant decline, currently reported at $3,381, down 8.01% in the past 24 hours.

At the annual discussion meeting of the American Economic Association held in San Francisco last week, former senior economist of the Obama administration and current Harvard University professor Jason Furman pointed out that if the labor market remains healthy this year, the Fed may only implement one rate cut, as the Federal Reserve has entered a new phase where it requires justification to support rate cuts.

Additionally, Furman also predicted a worse scenario, indicating that if the Fed's preferred PCE index measures inflation rising above 3% by mid-year, the Federal Reserve may consider raising interest rates. The CME FedWatch tool shows that traders expect that the likelihood of maintaining interest rates unchanged in this month's meeting has exceeded 95%.

On the other hand, asset management company Bitwise released a report yesterday stating that although the cryptocurrency market faces profit retracement, reduced institutional positions, and other obstacles by December 2024, the appreciation of the dollar and Federal Reserve policies have also led to a slight tightening of the financial environment, Bitcoin still receives support from on-chain data, and it is expected that from 2025 onwards, Bitcoin's performance will outperform traditional assets, with the expectation of reaching $200,000 by the end of this year, and predicting that by 2029, Bitcoin will officially break through $1 million.