BTC Price Drops Amid Treasury Yield Spike
Bitcoin experienced a sharp decline on January 7, 2025, as rising U.S. Treasury yields pressured risk assets across the board. BTC price today dropped over 5%, settling at $96,909 according to Coin Metrics. Ethereum mirrored the downturn, losing 8%, while the CoinDesk 20 index showed a 7% market-wide dip.
The sell-off extended to crypto-related stocks, with Coinbase and MicroStrategy shares tumbling by 8% and 9%, respectively. Bitcoin miners like Mara Holdings and Core Scientific also saw declines of 7% and 6%.
Economic Data Fuels Market Jitters
The drop in Bitcoin and broader markets followed stronger-than-expected economic indicators that dampened hopes for imminent Federal Reserve rate cuts. The Institute for Supply Management’s December PMI jumped to 54.1, exceeding November’s 52.1. Additionally, November’s JOLTS report revealed higher-than-expected job openings, signaling robust economic activity.
These indicators pushed the 10-year U.S. Treasury yield higher, prompting investors to recalibrate their expectations for rate cuts. Current projections now show less than a 50% chance of rate cuts before June. Historically, rising yields and delayed rate cuts have weighed heavily on growth-oriented risk assets, including cryptocurrencies.
Bitcoin Prediction: What’s Next for BTC?
Bitcoin’s recent performance contrasts with its earlier momentum. BTC was trading above $102,000 on Monday and had gained over 3% year-to-date. In 2024, Bitcoin surged by 120%, supported by expectations of clearer regulations and bullish sentiment in the digital asset space.
However, the Federal Reserve’s cautious stance on interest rates poses challenges for the crypto market. While rate cuts typically bolster Bitcoin prices, uncertainties surrounding monetary policy could introduce volatility in the coming months.
Liquidation and Market Impact
Bitcoin’s sudden slump triggered significant liquidations. Data from Coinglass revealed that over $483.44 million in long positions were liquidated within 24 hours. Other major cryptocurrencies also faced declines, with Ethereum down over 8% and Solana slipping 7%.
Traditional markets echoed the crypto downturn, as the S&P 500 fell 1.1% and the Nasdaq Composite dropped 1.9%. Nvidia shares also declined by 6.2%, despite new AI announcements at CES.
Outlook for Bitcoin
Although Bitcoin remains a favored asset for investors, the path forward is uncertain. The interplay between regulatory clarity and Federal Reserve policies will play a crucial role in shaping BTC price trends. Investors should remain vigilant as the economic landscape continues to evolve.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
