Bitcoin's drop to $96K is no ordinary event – it could be just the beginning of what 2025 will bring.
As investors rush to safety, will Bitcoin emerge as a haven or retreat?
The broader economic picture is once again under scrutiny. Bitcoin [BTC] fell from $102K to $96K in just 24 hours – a drop that was not random.
This event was triggered by a 'better than expected' U.S. economic report, causing market makers to be divided: Is this just another 'speculative play' to stir the market, or is it a sign of a looming 'collapse' of Bitcoin threatening in 2025?
Investors seek safety as fears of a Bitcoin collapse increase.
Another day, another Bitcoin collapse. The line between these two is becoming blurrier every day. Does the report on December 18 remind us of anything? Just as BTC hit $108K, the Fed's cautious stance on interest rates triggered a major sell-off.
The consequence? Bitcoin plummeted to $91K in less than two weeks, and the yield on the 10-year U.S. Treasury bond surged to a six-month high of 4.60%.
Now, a similar pattern is unfolding and only intensifying. The yield on the benchmark 10-year Treasury bond has risen to an eight-month high, up 7.5 basis points to 4.685% – the highest since April.
Source: Trading Economics
Undoubtedly, investors are rushing to abandon risk assets and flocking to traditional safe havens like U.S. bonds. The 5% drop in Bitcoin is not limited to the cryptocurrency market; it coincides with a major sell-off across the market, wiping out over $625 billion in U.S. stocks today.
Traders are clearly anxious, acting with 'extreme' caution. Even before the Fed hinted at a rate hike, investors had bet on a Bitcoin collapse, rushing to protect their profits.
This raises an interesting question: Is this Bitcoin collapse just speculation, or is there something bigger happening?
It may just be the beginning of what 2025 will bring.
Looking closely, the data shows a strong U.S. economy. The number of JOLTS jobs in November rose by 259,000 to a six-month high of 8.098 million, far exceeding the expected drop to 7.740 million.
Additionally, the ISM services index for December rose to 54.1, surpassing the forecast of 53.5.
What does this mean for the future? The Fed is likely to cut rates only once, not twice. With inflation near the 2% target, there is no need for a significant cut to stimulate demand.
This could put Bitcoin's 'safe haven' narrative to the ultimate test in 2025. Higher interest rates often make U.S. bonds more attractive, as illustrated in the chart above.
As capital moves out of risk assets like Bitcoin, it may face tough competition in the coming year.
With this shift, the idea of a Bitcoin collapse is no longer just chatter on social media – it is becoming a real possibility.
To stay ahead, closely monitoring the U.S. economic calendar is more important than ever. The idea is simple: protect your portfolio before the next downturn occurs.
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