Crypto markets faced a setback on Tuesday morning as Bitcoin (BTC) dropped below the $100,000 mark. This decline followed the release of stronger-than-expected U.S. economic data, which dampened the positive momentum seen in digital assets earlier this year.
The Bureau of Labor Statistics reported that job openings rose unexpectedly to 8.1 million in November, surpassing predictions of a decline. Additionally, the ISM Services Purchasing Managers Index for December came in at 54.1,. This exceeds expectations and indicating robust economic activity in the services sector. The Prices Paid subindex also showed significant inflationary pressure.
These reports rattled the bond market, pushing the 10-year U.S. Treasury yield up to 4.68%, close to multi-year highs. Consequently, U.S. stocks fell, with the Nasdaq down over 1% and the S&P 500 down 0.4%.
Bitcoin, which had been trading near $101,000, dropped to $96,800, marking a 5% loss in 24 hours. Other crypto also suffered, with Ethereum (ETH) and Solana (SOL) down 6%-7%, and Avalanche (AVAX) and Chainlink (LINK) falling 8%-9%. This price drop led to nearly $400 million in liquidated long positions in derivatives markets.
The strong economic data has led investors to rethink potential rate cuts by the Federal Reserve in 2025, with expectations now significantly lowered.
