Bitcoin plummeted by $6,000 due to the negative impact of the ISM non-manufacturing PMI and JOLTs job openings data.
Last night, U.S. employment data exceeded expectations, and inflation in the service sector accelerated. In November, U.S. JOLTs job openings unexpectedly increased by 259,000, reaching 8.098 million. The ISM non-manufacturing PMI rose from 52.1 in November to 54.1, and the price index increased from 58.2 in November to 64.4, reaching an 11-month high, suggesting that inflationary pressures still exist.
The two pieces of data suppressed market expectations for rate cuts, mainly reducing the probability of a rate cut before July, which is contrary to previous expectations of 2-4 rate cuts in 2025. The market expects there is over a 95% chance that the Federal Reserve will not cut rates in January, prompting a sharp drop in Bitcoin.
The trading volume during Bitcoin's rise over the past week has been relatively low, indicating that buying pressure is not strong. Therefore, the market is relatively weak and easily influenced by external factors. Yesterday's bearish candlestick not only engulfed the bullish candlestick from January 6 but also had a larger trading volume than January 6, indicating that selling pressure currently dominates, making further declines more likely.
The current question is whether it will drop below last month's low of 91,500 on the 30th.
Currently, the value of Bitcoin’s STH RP is 87,645. The trading volume from last night's decline was quite large, and selling pressure has clearly increased, so we cannot rule out the possibility of dropping below 91,500 and finding support at STH RP.
Next, we need to observe the changes in trading volume during continued declines. If the trading volume significantly decreases during further declines, it indicates weakening selling pressure, and the probability of dropping below 91,500 will be relatively small.
If the trading volume remains high during a continued decline, it indicates sustained strong selling pressure, which increases the probability of dropping below 91,500.
Many fans are asking if there will be any local surges in the near future.
To determine whether there is a surge in the market, two points should be considered:
(1) Trump's policy
(2) Expectations for rate cuts.
Trump's policy has been difficult to implement in the past few months, so just keep an eye on rate cut expectations. A significant downturn in March's rate cut expectations will lead to a drop in Bitcoin and its altcoins; conversely, the opposite is true.
If the probability is ambiguous, for example, hovering between 40-60%, then the market is in a consolidation phase. In a consolidation phase, one must be aware of the fluctuations; if decent profits are made, it’s best to take them and not be overly ambitious.
After some data was released last night, the probability of a rate cut in March dropped to 40%, while the probability of a rate cut in May remained around 50%. Additionally, Bitcoin has rebounded for 8 consecutive days, so a pullback is very normal, but Bitcoin is still only in a consolidation phase. Unless the probability of a rate cut in March falls below 20%, it is unlikely to approach 91,500 or even drop below it.
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 determine how the market will trend.
