Bitcoin experienced a rapid drop yesterday afternoon, falling from $98,500 by $3,000, causing many bulls to stop loss and exit. It is currently fluctuating within a narrow range above $95,000, although it has broken through $96,000 multiple times, 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 released the latest data last night (26th), showing that for 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 lower than the market expectation of 224,000, marking the lowest level in nearly a month. This indicates that although the labor market is cooling down, companies are still avoiding large-scale layoffs and also suggests that the Federal Reserve may not cut rates further.
At the same time, the overall unemployment rate in the U.S. is currently at 4.2%. According to data from the past decade, while the labor market is trending towards weakness, the unemployment situation is relatively mild and has not shown signs of deterioration. Jefferies economist Thomas Simons also stated:
Although the hiring pace has slowed, the pace of layoffs and dismissals has not accelerated, reflecting that companies are placing greater importance 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 funds 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 is decreasing
Last night, after the release of the employment data in the United States, the U.S. stock market and Bitcoin did not show a significant reaction. As 2024 is about to end, U.S. inflation is almost back to pre-pandemic levels, the economy continues to grow, and the labor market remains resilient. Therefore, economists expect that the risk of a U.S. economic recession will decrease, and a soft landing is possible.
However, it is worth noting that a major uncertainty factor next year could be the tariff policy that President Trump may implement. Goldman Sachs chief economist Jan Hatzius and others pointed out:
The biggest risk is large-scale comprehensive tariffs, which could severely impact economic growth.
Pantera founder: Bitcoin has reached escape velocity
If there are no interest rate cuts in January next year, it may not be good news for the U.S. stock market and Bitcoin. However, regarding the long-term trend of Bitcoin, Pantera founder Dan Morehead recently stated in an interview that in 2024, Bitcoin has shown a completely different situation compared to before; BTC has reached escape velocity and will not see large-scale setbacks again:
In 2013, there were concerns about whether regulators would ban Bitcoin. The situation in 2024 is completely different; Bitcoin has reached escape velocity.