Under the dual pressure of strong U.S. economic data and a weak bond market, expectations for the Fed to cut interest rates this year are facing unprecedented challenges. On Thursday, the U.S. stock market was closed in honor of former President Jimmy Carter, but the 24/7 cryptocurrency market could not escape the pressure. As investors anxiously await Friday’s employment data, the price of Bitcoin (BTC) has plummeted, reaching a new low in over a month.
On the eve of the U.S. release of the non-farm employment report for December, Bitcoin faced selling pressure again early this morning (10th), once dropping over $2,000, but then the decline was contained, holding above $91,000, with a minimum drop to $91,250.
This wave of sell-off undoubtedly casts a shadow over the cryptocurrency market, which experienced strong growth at the end of last year. At that time, due to Trump winning the U.S. election in November, the market was full of expectations for friendlier regulatory policies in the future, driving cryptocurrency prices to soar.
In addition, the U.S. Fed has cut interest rates by 100 basis points since September, and the loose monetary policy has become another favorable factor supporting the cryptocurrency market. However, a series of recent economic data show that U.S. economic growth and inflation far exceed expectations, causing the yield on 10-year U.S. Treasuries to surge by more than 100 basis points and continue to rise, directly weakening the benefits brought by interest rate cuts.
As market sentiment becomes increasingly cautious, investors are focusing on the non-farm employment report for December, set to be released on Friday. If the data points to strong economic growth again, it may completely extinguish expectations for interest rate cuts in the market.
How deep will Bitcoin fall?
Well-known trader Eugene Ng stated: "Currently, Bitcoin, Ethereum, and Solana (SOL) have all retraced to the price lows of December 5th, and the market seems to gradually accept the reality that these support levels may be broken. This is usually a key moment when panic sentiment begins to spread."
He pointed out that if Bitcoin falls below $90,000, the next important support level will be at $85,000.
Joe McCann, founder of venture capital fund Asymmetric Capital, further warned that if Bitcoin breaks below the $90,000 level, it could drop all the way to $75,000.
Is the U.S. government's 'coin-selling news' causing panic?
Some traders speculate that this wave of decline may be related to the news that "the U.S. Justice Department has been allowed to sell Bitcoins seized from Silk Road." However, renowned trader Skew pointed out after analyzing Binance order book data that the buying interest below the current Bitcoin price is still quite ample, enough to absorb the current selling pressure.
It is noteworthy that the current price fluctuations are relatively mild, partly because the selling pressure is not large, while the buying order liquidity below is clearly stronger than the selling pressure. The current market situation is actually not that pessimistic.
Selling coins before Trump takes office? U.S. court gives the green light: allows the Justice Department to sell 69,370 Bitcoins.
"Bitcoin faces selling pressure again, holding at $91,000! Analysis: If it breaks below 'this level,' it may drop to $75,000". This article was first published on (Blockke).
