Reasons for the plunge in Bitcoin, Ethereum, Ripple and other altcoins🔥🔥🔥

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On Tuesday, the cryptocurrency market experienced violent fluctuations, and Bitcoin, Ethereum, XRP and Solana fell sharply under the tense atmosphere. Risk aversion in global financial markets is high, due to rising bond yields and concerns about the macro economy, which directly led to a plunge in the price of crypto assets.

📉 Cryptocurrency data overview:

Bitcoin (BTC) fell 4% to a low of $97,700. Ethereum (ETH), XRP and Solana all recorded declines of more than 5%.

The decline offset Monday's gains, reflecting the risk-averse trend of the crypto market similar to other financial sectors (especially the stock market).

💵 Rising bond yields became the fuse:

The market awaited non-farm payrolls and the minutes of the Federal Reserve meeting, leading to a general rise in U.S. Treasury yields:

The 10-year yield jumped to 4.70%, an increase of 1.7%. The 30-year and 5-year yields hit 4.61% and 4.50%, respectively. The upward yield indicates that the Federal Reserve's monetary policy is tightening. The number of interest rate cuts in 2025 revealed in its December meeting was lower than expected, and the minutes on January 8 will further clarify the policy path.

🏗️ Labor market tensions escalate:

Data from the U.S. Department of Labor showed that the service industry has driven a surge in job vacancies, which has put additional pressure on Bitcoin and altcoins, indicating that if Friday's non-farm data is strong, it will strengthen the Fed's hawkish stance and increase inflationary pressure.

📉 Analysts warn of the risk of continued decline:

Some analysts pointed out that the surge in bond yields may push risky assets such as Bitcoin and altcoins further down. Moody's economist Mark Zandi warned that the expansion of the deficit during the Trump era may push up yields and guide funds to safe havens such as money market funds.

⚠️ Future outlook for the crypto market:

With the release of the Fed minutes and non-farm data imminent, the cryptocurrency market is expected to continue to fluctuate. The Fed's tough stance may increase selling pressure.

Investors are advised to act prudently and pay close attention to macroeconomic indicators, as they are profoundly affecting the dynamics of the crypto market.

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