On January 8, 2025, the price of Bitcoin experienced a sharp decline, once falling below the $96,000 mark, with a 24-hour drop of 5.88%. The sharp decline in Bitcoin prices was mainly affected by the following factors:

1. **Strong Economic Data**: The latest economic data released by the United States were strong. The ISM non-manufacturing PMI and JOLTs job vacancy data in December both exceeded expectations, showing that the U.S. economy is highly resilient. This has raised concerns about inflationary pressures and the possibility that the Federal Reserve may maintain high interest rate policies, putting pressure on risk assets such as Bitcoin.

2. **Market linkage effect**: The price correlation between Bitcoin and US stocks has increased, especially the performance of technology stocks has a significant impact on the price of Bitcoin. That day, technology stocks such as Nvidia and Tesla fell sharply, driving the price of Bitcoin down.

3. **High leverage risk**: The current market leverage ratio is close to the peak of the bull market in 2021, and the high leverage environment has intensified market volatility. When the price of Bitcoin began to fall, highly leveraged positions were forced to liquidate, leading to further selling and amplifying the price decline.

4. **Treasury bond yields rise**: The yield on the 10-year U.S. Treasury bond climbed to 4.69%, making traditional financial assets more attractive to investors, and funds flowed from high-risk assets such as Bitcoin to the more stable Treasury market. This weakens the buying power of Bitcoin.

5. **Changes in market sentiment**: Tesla CEO Elon Musk’s prediction of Bitcoin price also affected market sentiment. He said on Tuesday that the price of cryptocurrencies such as Bitcoin and Dogecoin could fall if dollar inflation issues are resolved.

The sharp drop in the price of Bitcoin caused more than 230,000 people to liquidate their positions, with the liquidation amount reaching US$712 million. Although the market may continue to fluctuate in the short term, some institutions remain optimistic about Bitcoin's long-term prospects, believing that short-term adjustments will provide opportunities to increase positions.