Important points
- Bitcoin briefly fell to $89,500, but has since recovered to $92,000, its lowest since November 2024.
- Rising U.S. Treasury yields and a better-than-expected jobs report accelerated the sell-off into riskier assets.
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Macroeconomic factors and rising bond yields weighed on the crypto market, with Bitcoin falling to $89,500 early Monday, its lowest level since November 18, 2024.
Although the leading digital asset has since recovered to $92,000, the broader crypto market remains under pressure.
Ethereum fell 8%, Solana fell 6.5%, Dogecoin fell 5%, and smaller tokens suffered double-digit losses, according to data from CoinGecko. The market capitalization of cryptocurrencies has decreased by 6% in the past 24 hours.
The index fell after Friday's positive U.S. jobs report prompted traders to dial back expectations for the Federal Reserve to cut interest rates.
Interest rate traders expect the federal funds rate to remain stable at 4.25% to 4.5% for most of the year, according to the CME FedWatch tool.
Speculation of rate cuts began to surface in late September, October, and December, and the probability of a 25 basis point rate cut at the last three Federal Open Market Committee meetings in 2025 remains less than 42%. .
U.S. Treasury yields remained high, with the 10-year yield at 4.78%, while the dollar index rose above 110, the highest level since 2022.
“Solid inflation, strong economic data, and the Federal Reserve's cautious stance on lowering interest rates are constraining liquidity,” said James Toledano, chief operating officer at Unity Wallet. said. “This limits demand for speculative assets like Bitcoin and creates short-term volatility.”
The drop in prices led to a total of $730 million in crypto liquidations in the past day. According to Coinglass data, $617 million in long positions were liquidated, while short positions totaled $112 million.
Amid the recent market turmoil, Bitcoin's market power has increased to 58.5%. This could potentially delay the long-awaited alternative season.
Many traders expected an alternative season to materialize the year after Bitcoin's halving. However, this alternative season may have been short-lived.
After Trump was elected president in November, it appeared as if a mini-alternative season had arrived, potentially producing short-lived rallies that last less than two months and culminate days before Christmas. .
The initial optimism surrounding the launch of a U.S. Bitcoin ETF and President-elect Donald Trump's pro-crypto comments has faded. Inflation concerns and stronger-than-expected US economic indicators further worsened the mood.
Toledano explained that the bull market could accelerate again if President Trump's policies match market expectations.
However, disappointments or unforeseen events can lead to long-term consolidation or further revisions.
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