Title: bracing for turbulence: crypto market tremors as fed actions ignite price crash fears
Bitcoin saw a wild swing after impressive U.S. jobs data doused hopes of Fed interest rate cuts and sent stocks tumbling. The digital currency plummeted to around $92,000 per coin, reigniting a sell-off that had stalled earlier this week due to fears of a potential Bitcoin price crash.
Now, with Elon Musk issuing a surprising Bitcoin price warning, crypto traders are scrambling to decipher the implications of the latest changes in Fed rate cut expectations for Bitcoin's price.
Bitcoin's retreat below $93,000 underscores the growing influence of macro conditions. This withdrawal triggered over $1 billion in liquidations, with long positions primarily driving the forced unwinding of leveraged bets.
The U.S. economy surged by 256,000 jobs in December, marking the most significant monthly increase since March and double the projected 155,000 new jobs. The unemployment rate also dropped to 4.1%.
These favorable economic data have strengthened the Federal Reserve's argument for maintaining interest rates, seriously questioning earlier predictions of sustained rate cuts through 2025. The surge in bond yields, with the 10-year U.S. Treasury yield reaching its highest level since late 2023, has further fueled this trend.
There is a possibility that Bitcoin could dip below $92,000 again, further weakening its technical sentiment and potentially driving the price down to as low as $80,000.
Despite these short-term concerns, market analysts remain bullish on Bitcoin's long-term prospects. They believe the recently announced jobs data could provide the much-needed momentum to break through the $100,000 barrier once more and climb past its all-time high of $108,000.
In a nutshell, the U.S. jobs data and potential Fed interest rate changes have caused turbulence in the Bitcoin market, leading to significant price volatility and uncertainty.
Jerome Powell, the Federal Reserve chairman, might see the crypto crash as an opportunity to reaffirm the Fed's commitment to maintaining interest rates, given the recent strong U.S. jobs data and rising bond yields. The crypto market, including Bitcoin, could be particularly sensitive to Fed rate cut expectations, as a potential crypto crash could be exacerbated by an increase in interest rates. Elon Musk's Bitcoin price warning further added to the turbulence in the market, causing crypto traders to reassess their positions and risk strategies.
