Why Bitcoin fell to $96K after U.S Economic Report

Bitcoin’s crash to $96K is no ordinary event – it may be just the beginning of what 2025 has in store.
As investors scramble for safety, will Bitcoin emerge as a haven, or will it retreat?

Once more, the overall financial landscape is drawing considerable attention. Within a day, the value of Bitcoin [BTC] dropped from $102,000 to $96,000 – a decline that wasn’t likely due to chance.

Instead, the event was initiated by a surprising positive U.S. economic data, causing market analysts to divide opinions: Was this merely a ‘hypothetical’ attempt to disrupt the market, or could it signal an upcoming Bitcoin ‘downturn’ in 2025?

Investors flee to safety as fear of Bitcoin crash mounts

Day by day, it seems we’re witnessing another Bitcoin downturn. The boundary between growth and decline is becoming increasingly indistinct. Does the news from December 18th sound familiar? As Bitcoin reached $108K, the Federal Reserve’s cautious approach to interest rates ignited a significant sell-off.

In just about two weeks, the price of Bitcoin plummeted to approximately $91,000, while the yield on the U.S. 10-year Treasury Bond reached a six-month peak of 4.60%.

presently, we’re seeing a similar development that’s growing stronger. The rate on the 10-year U.S. Treasury bond has spiked to a peak not seen in eight months, increasing by 7.5/100ths of a percent to reach 4.685%. This is the highest it’s been since April.

Without a doubt, investors are hastily moving away from riskier investments and gravitating towards conventional safe options such as U.S. bonds due to current market conditions. The 5% fall in Bitcoin wasn’t isolated to the cryptocurrency market; it occurred concurrently with a substantial sell-off across various markets today, resulting in over $625 billion of losses in the U.S. stock market.

Traders seem to be quite cautious, even bordering on extreme carefulness. Before the Federal Reserve indicates an interest rate increase, investors are already placing wagers that Bitcoin will drop in value, hurriedly taking steps to safeguard their earnings.

This leads us to a thought-provoking question: Could the recent drop in Bitcoin’s value be due to simple speculation, or is there a larger underlying factor involved?

It might just be the start of what 2025 has in store

Upon close examination, the data indicates a robust U.S. economy. The number of job openings in November increased significantly by approximately 259,000, reaching a six-month peak of 8.098 million – far exceeding the forecasted decline to 7.740 million.

Plus, December’s ISM services index climbed to 54.1, surpassing the forecast of 53.5.

In simpler terms, it implies that based on current conditions, the Federal Reserve might lower interest rates just once instead of twice in the future. This is due to inflation being close to their desired 2% level, which means there’s currently no pressing need for substantial rate cuts aimed at boosting demand.

Read Bitcoin’s [BTC] Price Prediction 2025–2026

2025 might be the year that thoroughly tests the ‘safe-haven’ label of Bitcoin, given that increasing interest rates tend to make U.S. bonds a more attractive option, as depicted in the graph provided.

In the upcoming year, Bitcoin might encounter stiff competition as capital tends to shift towards less risky investments.

With this change, the notion that Bitcoin might experience a collapse has moved beyond mere online speculation; it’s now starting to seem like a legitimate concern.

Keeping a close eye on the U.S. economic schedule has become crucial now more than ever, as it can help you safeguard your investments before the next market downturn occurs.

2025-01-08 11:22

Investors flee to safety as fear of Bitcoin crash mounts

It might just be the start of what 2025 has in store

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