Bitcoin experienced a rapid decline yesterday afternoon, dropping $3,000 from $98,500, causing many bulls to stop-loss and exit. It is currently fluctuating narrowly above $95,000. Although it has repeatedly broken through $96,000, it quickly fell back, and there is still no clear trend.
Initial unemployment claims were lower than expected.
On the other hand, the U.S. Department of Labor announced the latest data last night (26th), showing that as of the week ending December 21, the number of initial unemployment claims in the U.S. fell to 219,000 after seasonal adjustment, a decrease of 1,000 from the previous week, and below the market expectation of 224,000, marking the lowest level in nearly a month. This indicates that although the labor market is cooling, companies are still avoiding large-scale layoffs, suggesting that the Federal Reserve may not further cut interest rates.
Meanwhile, the overall unemployment rate in the U.S. is currently 4.2%. Based on data from the past decade, although the labor market is trending weak, the unemployment situation is relatively mild, with no signs of deterioration. Jefferies economist Thomas Simons also stated:
Although the hiring pace has slowed, the rate of layoffs and dismissals has not accelerated in tandem, reflecting that companies are placing greater emphasis on retaining scarce labor.
The probability of the Fed pausing interest rate cuts in January is as high as 91.4%.
According to the CME FedWatch tool, the current market expects the Federal Reserve to pause interest rate cuts in January next year, with a 91.4% probability of keeping the federal benchmark interest rate unchanged in the current range of 4.25% to 4.5%, consistent with predictions from a week ago.
Economists: The risk of a U.S. economic recession has decreased.
After the U.S. employment data was released last night, there was no significant reaction in the U.S. stock market and Bitcoin. As 2024 is about to end, inflation in the U.S. has nearly returned to pre-pandemic levels, and the economy continues to grow, with the labor market still showing resilience. Therefore, economists expect the risk of a U.S. economic recession to decrease, and a soft landing is likely achievable.
However, it is worth noting that a major uncertainty factor next year may be the tariff policies that elected President Trump may implement. Goldman Sachs chief economist Jan Hatzius and others pointed out that:
The biggest risk is large-scale comprehensive tariffs, which could severely impact economic growth.
Pantera founder: Bitcoin has reached escape velocity.
If there is no interest rate cut in January next year, it may not be good news for U.S. stocks and Bitcoin. However, regarding Bitcoin's long-term trend, Pantera founder Dan Morehead recently stated in an interview that in 2024, Bitcoin has shown a completely different situation compared to before, and BTC has reached escape velocity, meaning there will be no large-scale regressions.
In 2013, people were still concerned about whether regulators would ban Bitcoin. The situation in 2024 is completely different; Bitcoin has reached escape velocity.