Bitcoin Heads to $90K as Crypto Selloff Gathers Steam

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What to know:

  • Bitcoin has returned to levels not seen in more than one month.
  • SOL and LINK were notable underperformers among altcoins.
  • The selling comes ahead of Friday morning’s job report, which, if strong, might have markets eliminating the idea of any Fed rate cuts in 2025.

As a researcher, I find myself reflecting on the unique nature of cryptocurrency markets, which remain active round-the-clock unlike their counterparts in traditional U.S. stock exchanges. In contrast to Thursday’s closure for remembrance of former President Jimmy Carter, crypto is currently shouldering the entire weight of any apprehension leading up to tomorrow’s December employment report release.

Around late afternoon, the value of Bitcoin (BTC) was back at prices unseen for over a month, managing to stay slightly above $91,000. It had dropped approximately 3% in the last 24 hours.

In a parallel trend, the comprehensive CoinDesk 20 Index is experiencing a decline. However, it’s worth noting that Solana (SOL) and Chainlink (LINK) are significantly underperforming, with losses exceeding ten percent each.

Cryptocurrency prices have been falling after a strong surge in Q4 2024, which was triggered by Donald Trump’s election win in November and optimism about more favorable regulations from Washington D.C.

One supporting pillar for cryptocurrencies, which was the easier monetary policy implemented by the U.S. Federal Reserve through reducing its overnight interest rate by 100 basis points since September, has been removed. This is because a series of economic reports indicated that the economy and inflation were stronger than anticipated, leading to an increase in long-term interest rates yields by over 100 basis points since the Fed started lowering short-term rates.

The sales figures for today are expected to precede the December job report due out on Friday morning. This latest batch of robust economic data may lead markets to dismiss entirely the prospect of interest rate cuts in 2025 and even start considering the possibility of rate increases over the following months.

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2025-01-10 00:00