The crypto market on Tuesday saw a sharp decline, as major coins like Bitcoin, Dogecoin, and Solana all plummeted. The cause was new employment data in the U.S. and changing expectations about interest rates from the Federal Reserve (Fed).



Bitcoin Drops Below 100,000 USD



Bitcoin, after reaching a peak near 101,000 USD, fell to 92,500 USD, down more than 8% in a day. Ethereum and Dogecoin also dropped 7%, while Solana lost about 6% of its value.



Employment data shows that the number of job openings in the U.S. was higher than expected, signaling that the economy remains strong, which dampens expectations that the Fed will cut interest rates in the first half of 2025.



385 Million USD Liquidated in 24 Hours



According to data from #coinglass , the market saw liquidations amounting to 385 million USD in the past 24 hours, including 230 million USD in just the last 4 hours. Most of this was from long positions, accounting for 212 million USD.



The liquidation of long positions is a consequence of strong volatility, as the crypto market is sensitive to changes in interest rate policy.



Interest Rates and Their Impact on Crypto



The crypto market has previously benefited significantly from low interest rates, as this encourages investment in high-risk assets like Bitcoin. However, the Fed's aggressive rate hikes in 2022 aimed at controlling inflation have diminished Bitcoin's appeal.



In 2023, the Fed cut interest rates, providing a significant boost to the crypto market. Bitcoin reached a new historical peak of 108,135 USD in December, thanks to Trump's presidential victory and the approval of a spot Bitcoin ETF in the U.S.



However, in December, Fed Chairman Jerome Powell emphasized that the central bank would not aggressively cut interest rates and would proceed cautiously in its next policy adjustments.



Conclusion: Volatility Continues



The crypto market is facing dual pressure from economic data and changing interest rate expectations. This could be a necessary correction phase after a strong price increase, but it also serves as a reminder for investors to closely monitor macro events.



Despite short-term fluctuations, the long-term potential of crypto remains unchanged. For investors, patience and the right strategy will be key to weathering this storm. 🌟