Key takeaways
- Bitcoin briefly fell to $89,500 before rallying to $92,000, marking its lowest level since November 2024.
- Rising U.S. Treasury yields and stronger-than-expected jobs data spurred selling of riskier assets.
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Bitcoin fell to $89,500 early Monday, hitting its lowest level since November 18, 2024, as macroeconomic factors and rising bond yields weighed on crypto markets.
The leading digital asset later recovered to $92,000, but the broader crypto market remained under pressure.
According to CoinGecko data, Ethereum fell 8%, Solana 6.5% and Dogecoin 5%, with smaller tokens seeing double-digit losses. The total crypto market cap decreased by 6% in the last 24 hours.
The selloff follows the release of strong U.S. jobs data on Friday, which led traders to lower their expectations for a Federal Reserve rate cut.
According to the CME FedWatch tool, interest rate traders widely expect the federal funds rate to remain stable between 4.25% and 4.5% for most of the year.
Expectations of rate cuts begin to surface in the following months – September, October and December – with the odds of a 25 basis point cut remaining below 42% for each of the last three Federal Rate Committee meetings. open market in 2025.
U.S. Treasury yields remained high, with the 10-year yield at 4.78%, while the dollar index rose above 110, reaching levels not seen since 2022.
“Persistent inflation, robust economic data and the Federal Reserve’s cautious approach to lowering interest rates have dampened liquidity,” said James Toledano, chief operating officer at Unity Wallet. “This limits the appetite for speculative assets like Bitcoin and creates short-term volatility.”
The price drop triggered $730 million in total crypto liquidations over the past day. Data from Coinglass revealed that $617 million of long positions were liquidated, while short liquidations totaled $112 million.
Bitcoin’s market dominance has soared to 58.5% amid recent market turmoil. This potentially delayed the long-awaited alternate season.
Many traders had predicted that the alt season would materialize within a year of the Bitcoin halving. However, this alternate season may have been brief.
An alternate mini-season appeared to emerge after Trump was elected president in November, potentially creating a short-lived rally that lasted less than two months, peaking just days before Christmas.
Initial optimism surrounding Bitcoin ETF launches in the United States and pro-crypto statements from President-elect Donald Trump has waned. Inflation fears and stronger-than-expected U.S. economic data helped dampen sentiment.
Toledano explained that if Trump’s policies meet market expectations, the uptrend could resume.
However, any disappointments or unexpected events could lead to prolonged consolidation or even further corrections.
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