Bitcoin Avalanche Drops 7,000 Points! What Factors Are Causing the Crash? Will Altcoin Bulls Come Again?

Bitcoin just broke through $100,000 on January 6, only to collapse within a day. Influenced by a series of strong economic data, market expectations for interest rate cuts have cooled, U.S. Treasury yields have soared, and with U.S. stocks also pulling back, Bitcoin faced its largest drop in two weeks, once again falling below the $100,000 mark. As of the time of writing, Bitcoin is priced at $95,844, with a 24-hour decline of 5.91%.

The market downturn began last night (the 7th), driven by disappointing ISM Non-Manufacturing PMI and JOLTs job openings data.

According to data from the Institute for Supply Management (ISM), the U.S. services sector performed better than market expectations in December, with the input price index rising to near a two-year high.

At the same time, U.S. employment data indicates that the job market is unexpectedly hot, with an 8 million job vacancy gap, suggesting that businesses are in relatively good shape, which also means that the previous assertion that "interest rate cuts are needed to save the U.S. economy" is not as critical anymore.

These two pieces of data have lowered market expectations for interest rate cuts, mainly reducing the anticipated intensity of cuts in March and June, contradicting previous expectations of 2-4 rate cuts by 2025. The market now expects over a 95% probability that the Federal Reserve will not cut rates in January, leading to a sharp drop in Bitcoin's price.

In simple terms: the drop yesterday and today is due to the slowdown in interest rate cuts. Moreover, the slowdown in interest rate cuts is also related to Trump's policies (expelling low-end immigrants, tariffs on China, Mexico, and Canada). Recently, the ups and downs of Crypto have been influenced by the U.S. and Trump, which in a sense reflects a shared source of profit and loss.

This also meant that although Bitcoin broke through the $100,000 barrier yesterday, it only lasted about 24 hours before rapidly falling back. Bitcoin had recently reached a high of nearly $103,000 as many companies continued to increase their investments and institutional investors pulled back funds, but the bulls failed to maintain the upward momentum, coinciding with the release of the employment report, where employment exceeded expectations, causing prices to gradually decline, ultimately dropping to the $95,000 level.