Bitcoin only recovered and broke through $100,000 on January 6, but it collapsed again within a day. Affected by a series of strong economic data, the market's expectations for interest rate cuts have cooled, US bond yields have soared, and the US stock market has also pulled back. Bitcoin has suffered its biggest drop in two weeks and has once again lost the $100,000 mark. As of writing, Bitcoin is trading at $95,844, down 5.91% in the past 24 hours.
The market decline started last night (7) due to negative ISM non-manufacturing PMI and JOLTs job vacancy data.
According to data from the Institute for Supply Management (ISM), the performance of the U.S. service sector in December exceeded market expectations, with the input price index rising to a near two-year high.
At the same time, according to the employment data released by the US, the job market is surprisingly hot, with an 8 million job gap. It seems that the corporate situation is quite good, which also means that the previous assertion of 'needing to cut interest rates to save the US economy' is not as crucial anymore.
Two pieces of data have lowered market expectations for interest rate cuts, primarily because the predicted cuts in March and June have also decreased, contradicting the previous expectation of 2-4 cuts by 2025. The market expects that there is over a 95% probability that the Federal Reserve will not cut rates in January, leading to a significant drop in Bitcoin.
In simple terms: the drop yesterday and today is due to the slowing of interest rate cuts. Moreover, the slowdown in interest rate cuts is also related to Trump's policies (expelling low-end immigrants, tariffs on China and Mexico). Recently, the fluctuations in crypto are all influenced by the US and Trump, which in a sense reflects the source of gains and losses.
This caused Bitcoin to break through the $100,000 barrier yesterday, but only lasted about 24 hours before quickly falling back. Recently, Bitcoin reached a high of nearly $103,000 under the circumstances of many companies increasing their investments and institutional investors withdrawing funds. However, the bulls failed to maintain the upward momentum, coinciding with the release of the employment report which was better than expected, leading to a gradual price retreat, ultimately dropping to the $95,000 level.
Will it test the low point of $91,500 from the 30th of last month?
The current price is around $95,000, which is also in the middle of a range. If it cannot break through the top of this range but instead rebounds to the top and continues to face resistance, the market is likely to once again retreat to the bottom of the range.
As for the fluctuations within the range, I believe they will not significantly affect the larger market trend. If it rebounds and returns to the upper part of the range, there is still a chance for a short-term upward trend. Otherwise, the price may directly break below the bottom of the range, leading to a higher probability of a larger decline.
Next, we need to observe the changes in trading volume as the price continues to decline. If the trading volume significantly decreases during the continued drop, it indicates that selling pressure is weakening, making it less likely to touch the previous month's low of $91,500.
If the volume remains high during the continued decline, it indicates that selling pressure is still strong, making it more likely to break below $91,500.
In short, BTC has currently dropped to around $95,000, but it hasn't broken the bottom, so it may not be the lowest point yet. If it truly breaks below $95,000, everyone can basically close their eyes and buy in batches, buying more as it drops! If you don't have a position yet, don't rush to chase peaks or cut losses!
When will the main upward trend of altcoins start?
The market has just shown some improvement but was knocked back down to the bottom. At the same time, Bitcoin has started to drop by 5 points, while altcoins basically maintain a script of around 10 points. Altcoins are being severely drained by Bitcoin, and we have experienced this kind of market many times, so we need to get used to the fact that every time Bitcoin drains value, a new market trend will begin!
The current market is slowly recovering compared to the previous situation, but some altcoins have only rebounded a little. The reason is also that BTC is siphoning off value, and some have been drawn away by first-level market AI agents, coupled with the continuous washout in the past and the lack of new narratives. Therefore, we can only wait for Ethereum to rise, which will completely unlock the sentiment for altcoins.
But don't worry, this doesn't mean that the opportunity is gone! What we need to do now is wait for signals, make precise layouts, and the main upward trend of altcoins may be on the way. So let's prepare our layouts, hold onto our chips, and patiently wait!
This week, there are actually quite a few macro data releases, and these data will affect market movements to some extent, especially the data on Thursday and Friday. Pay attention to timely profit-taking during the fluctuations.
