Overview

Bitcoin (BTC) dropped over 4% on a Tuesday morning in the U.S. as robust economic data created uncertainty in the crypto markets, impacting its earlier bullish trajectory.

Economic Indicators Impacting Prices

• The U.S. Bureau of Labor Statistics reported that job openings unexpectedly surged to 8.1 million in November, up from 7.8 million.
• Simultaneously, the ISM Services Purchasing Managers Index reflected a reading of 54.1 for December, surpassing the anticipated 53.3 and previous month's 52.1. The Prices Paid subindex was 64.4, significantly above the expected 57.5.

Market Reactions

These strong reports contributed to a volatile bond market, with the 10-year U.S. Treasury yield climbing to 4.68%. This spike in rates tempered expectations for potential Federal Reserve rate cuts. Investors are now only contemplating one reduction in rates for the entire year.

BTC fell from nearly $101,000 to around $97,800, resulting in substantial liquidation of long positions, totaling approximately $300 million across derivatives markets. The rapid price decline particularly affected major altcoins like Ethereum (ETH) and Solana (SOL), which dropped by 6%-9%.

Conclusion

With the ongoing uncertainty due to economic data, market participants are adjusting their strategies, reflecting a cautious outlook for interest rates moving forward. Looking ahead, the likelihood of another rate cut is minimal, with uncertainties still looming over the crypto landscape.