In the face of strong U.S. economic data and a weak bond market, the market's expectations for the Federal Reserve (Fed) to cut interest rates this year are facing unprecedented challenges. On Thursday, the U.S. stock market was closed in mourning for 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 significantly dropped to a new low in over a month.
On the eve of the U.S. release of the non-farm employment report for December last year, Bitcoin faced selling pressure again early this morning (10th), dropping more than $2,000 at one point, but the decline later tapered off, holding above $91,000, with a minimum drop to $91,250.
This wave of selling undoubtedly casts a shadow over the cryptocurrency market, which had just experienced a strong surge at the end of last year. At that time, due to Trump's victory in the November U.S. election, the market was full of expectations for a more friendly regulatory policy in the future, driving cryptocurrency prices to soar.
In addition, the U.S. Fed cut interest rates by 100 basis points since September, and the loose monetary policy has become another positive factor supporting the cryptocurrency market. However, a series of recent economic data shows that U.S. economic growth and inflation are far exceeding expectations, causing the yield on 10-year U.S. Treasuries to rise by more than 100 basis points and continue to trend upward, directly undermining the benefits brought by interest rate cuts.
As market sentiment becomes increasingly cautious, investors are focusing on the non-farm employment report for December, which is set to be released on Friday. If the data points to strong economic growth again, it may completely extinguish market expectations for interest rate cuts.
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 5. The market seems to gradually accept the reality that these support levels may be breached. This is often 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 loses the $90,000 level, it may plunge all the way down to $75,000.
Is the U.S. government's 'coin selling news' causing panic?
Some traders speculate that this wave of declines may be related to the news that "the U.S. Justice Department was approved to sell Bitcoins seized from Silk Road." However, renowned trader Skew pointed out after analyzing Binance order book data that there is still substantial buying pressure below the current Bitcoin price, enough to absorb the current selling pressure.
It is worth noting that the current price fluctuations are relatively mild, partly because the scale of selling pressure is not large, while the buying liquidity below is significantly stronger than the selling pressure. The current market situation is actually not that pessimistic.
Rushing to 'sell 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 price', it may plunge to $75,000" This article was first published on (Block Tech).
