Strong U.S. Economic Data Pushes Bitcoin Below $98K, Sparking $300M in Crypto Liquidations.

U.S. Economic Data Pressures Crypto: Bitcoin Drops Below $98K Amid Rate Cut Uncertainty

Bitcoin (BTC) slipped under the $100,000 level on Tuesday as unexpectedly strong U.S. economic indicators dashed hopes for near-term Federal Reserve rate cuts. The drop followed data showing robust job openings and stronger-than-expected activity in the services sector, both of which boosted U.S. Treasury yields and weighed on risk assets.

The Bureau of Labor Statistics reported an unexpected rise in November’s JOLTS job openings to 8.1 million, up from 7.8 million in October and surpassing the projected 7.7 million. Simultaneously, December’s ISM Services PMI climbed to 54.1, outperforming forecasts of 53.3 and November’s 52.1. The index’s Prices Paid component surged to 64.4, indicating persistent inflationary pressures.

The data spooked bond markets, pushing the 10-year Treasury yield up to 4.68%, just shy of multi-year highs. Equity markets turned red, with the Nasdaq sliding over 1% and the S&P 500 losing 0.4% by late morning.

Bitcoin mirrored the sell-off, falling to $97,800 after trading above $101,000 earlier in the day. The 24-hour decline of 4% erased recent gains. Altcoins were hit harder, with Ethereum (ETH) and Solana (SOL) losing around 6%, and Avalanche (AVAX) and Chainlink (LINK) tumbling by 8%-9%.

According to CoinGlass, the swift decline triggered nearly $300 million in liquidations of long positions, marking the first major shakeout of leveraged traders this year.

The economic strength also reshaped rate-cut expectations for 2025. The CME FedWatch tool now shows just a 37% chance of a rate cut at the Federal Reserve’s March meeting, down from nearly 50% a week ago. Expectations for a May cut also dropped significantly. Analysts at Chapman Capital say investors now anticipate only one 25 basis point cut for all of 2025, compared to earlier projections of multiple reductions.

The renewed correlation between macroeconomic factors and crypto performance underscores bitcoin’s sensitivity to shifts in monetary policy, leaving investors cautious as market momentum cools.