The market drop on January 8, 2025, can be attributed to a combination of key factors:

Rising US Treasury Yields: A sharp increase in the US 10-year Treasury yield sparked concerns over higher borrowing costs and potentially slower economic growth. This rise pressured riskier assets, including stocks and cryptocurrencies.

Strong US Economic Data: Unexpectedly strong economic data, particularly labor market figures and an upbeat ISM services index, led investors to reassess the likelihood of interest rate cuts by the Federal Reserve. This shift in expectations prompted a reevaluation of asset valuations.

Massive Cryptocurrency Liquidations: The cryptocurrency market saw significant sell-offs, with $480 million in liquidations, causing sharp drops in major cryptocurrencies like Bitcoin and Ethereum. Bitcoin fell 5%, and Ethereum dropped 9%, compounding market volatility.