Important takeaways
- Bitcoin fell to $89,500 before recovering to $92,000, the lowest level since November 2024.
- Rising US Treasury yields and stronger-than-expected jobs data spurred selling of riskier assets.
Bitcoin fell to $89,500 early Monday, hitting its lowest point since November 18, 2024, as macroeconomic factors and rising bond yields weighed on crypto markets.
The leading digital asset later recovered to $92,000, but the broader crypto market remained under pressure.
According to CoinGecko dataEthereum fell 8%, Solana fell 6.5% and Dogecoin fell 5%, with smaller tokens seeing double-digit losses. The total crypto market value decreased by 6% in the last 24 hours.
The sell-off followed strong US jobs data released on Friday, which led traders to reduce expectations of interest rate cuts from the Federal Reserve.
According to CME FedWatch Toolinterest rate traders largely expect the Federal Funds rate to remain steady at 4.25% to 4.5% for most of the year.
Interest rate cut expectations are beginning to emerge in later months – September, October and December – with probabilities of a 25 basis point cut remaining below 42% for each of the final three Federal Open Market Committee meetings in 2025.
US Treasury yields remained high, with the 10-year yield at 4.78%, while the dollar index topped 110 and hit levels not seen since 2022.
“Stick inflation, robust economic data and the Federal Reserve’s cautious approach to rate cuts have dampened liquidity,” said James Toledano, Chief Operating Officer at Unity Wallet. “This limits the appetite for speculative assets like Bitcoin and creates short-term volatility.”
The price drop triggered $730 million in total crypto liquidations over the past 24 hours. Data from Coinglass revealed that $617 million in long positions were liquidated, while short liquidations totaled $112 million.
Bitcoin’s market dominance climbed to 58.5% amid recent market turmoil. This has potentially delayed the long awaited alt season.
Many traders had expected the alt season to materialize in the year following Bitcoin’s halving. However, this alto season may have been short.
A mini alt season appeared to emerge after Trump was elected president in November, potentially creating a short-lived rally that lasted less than two months and culminated just days before Christmas.
The initial optimism surrounding US Bitcoin ETF launches and pro-crypto statements by President-elect Donald Trump has waned. Inflation worries and stronger-than-expected US economic statistics have contributed to subdued sentiment.
Toledano explained that if Trump’s policies meet market expectations, the bull could pick up again.
But any disappointments or unexpected events could lead to extended consolidation or even further corrections.
