Bitcoin Falls Below $98K as Strong U.S. Economic Data Dampens Rate Cut Hopes

Bitcoin (BTC) slipped under the $100,000 mark on Tuesday, pressured by unexpectedly robust U.S. economic reports that diminished expectations for Federal Reserve rate cuts in the near term.

The Bureau of Labor Statistics revealed November’s JOLTS job openings rose to 8.1 million, surpassing the previous month’s 7.8 million and outpacing analyst forecasts of 7.7 million. Meanwhile, the ISM Services PMI climbed to 54.1 in December, beating predictions of 53.3 and November’s 52.1. Notably, the Prices Paid subindex surged to 64.4, signaling persistent inflationary pressures.

The stronger-than-expected data pushed the 10-year U.S. Treasury yield up by five basis points to 4.68%, nearing multi-year highs, and weighed on equity markets. The Nasdaq fell more than 1%, and the S&P 500 dipped by 0.4% in morning trading.

Crypto markets mirrored the risk-off sentiment. Bitcoin, which had held above $101,000 earlier, dropped to $97,800, marking a 4% decline over the past 24 hours. Altcoins faced steeper losses, with Ethereum (ETH) and Solana (SOL) sliding 6%-7%, while Avalanche (AVAX) and Chainlink (LINK) plunged by nearly 9%.

The sell-off wiped out $300 million in leveraged long positions, according to CoinGlass, marking the year’s first major liquidation event.

The strong economic figures also reshaped monetary policy expectations. Markets had already discounted a rate cut at the Fed’s January meeting, but now anticipate only a 37% chance of easing in March, down from nearly 50% a week ago, according to the CME FedWatch tool. Expectations for a May rate cut have similarly fallen, with investors pricing in just one 25 basis point cut for all of 2025.

The sharp pullback underscores bitcoin’s continued sensitivity to macroeconomic shifts, with analysts warning that further strength in U.S. economic data or rising Treasury yields could add pressure to the digital asset market in the weeks ahead.