TLDR
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- The crypto market saw sharp declines, with Bitcoin falling 5% from its peak of $102,000
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- Strong US labor market data and stable interest rate forecasts from the Fed dampened hopes of an easing of monetary policy
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- Ethereum, XRP, Solana and others also saw a 4-6% decline; Liquidations worth $400 million occurred
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- Short-term Bitcoin holders are struggling with profitability amid volatile price movements
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- Dogecoin is struggling with key resistance at the macro 0.5 Fibonacci extension level around $0.40
The cryptocurrency market experienced a sharp downturn as Bitcoin fell 5% from its recent high of $102,000. This decline pushed Bitcoin to the $96,500 level, where it remained hours after the initial decline. The retreat came amid stronger-than-expected U.S. job vacancies data and Federal Reserve forecasts point to stable interest rates.
According to the JOLTS report Job openings in the United States rose to 8.1 million in November, up from October’s upwardly revised 7.8 million. This robust labor market data dampened hopes for monetary easing, suggesting that the Federal Reserve has less urgency to cut interest rates. The CME FedWatch tool predicts a 95 percent chance that the Fed will keep interest rates stable at its upcoming meeting on January 29th.
The broader crypto market also saw declines in response to these economic data. According to data from CoinGecko, Ethereum fell 6.4%, XRP fell 4.8%, Solana fell 5.7%, and Dogecoin fell 6.5% in the last 24 hours. The Pudgy Penguins meme token saw the largest decline at 12.3%.
According to data from Coinglass, this market downturn resulted in over $400 million in liquidations, with $275 million occurring in just four hours. The crypto market had already gained over 11% in early 2025 before this 5% drop.
Technical analysis suggests that short-term Bitcoin holders are struggling with profitability issues amid these volatile price movements. On-chain data suggests that a growing percentage of these investors are trading at or near a loss. This struggle could potentially lead to profit-taking, which could hamper Bitcoin’s uptrend in the short term.
For Dogecoin, the meme-inspired cryptocurrency is currently battling a key resistance level defined by the macro 0.5 Fibonacci extension around the $0.40 price point. Crypto analyst Kevin Doops called this level a “moment of truth” for DOGE, noting that a successful breach is crucial for the token to reach higher levels.
Before this latest decline, Bitcoin had risen to a new all-time high of $108,000. However, the sharp decline from this peak has created challenges for investors and traders, especially short-term investors. As the market grapples with changing dynamics and economic data, volatility has increased, making it more difficult for these investors to maintain profitability.
Despite the current challenges, some experts remain optimistic about the long-term outlook for Bitcoin and the broader crypto market. However, the near-term picture remains uncertain as investors navigate the impact of macroeconomic factors and market sentiment.
As the crypto market continues to develop, investors and traders will closely monitor key economic indicators, Federal Reserve policy decisions, and technical levels to assess the potential for future price movements. The interplay of these factors will likely shape the performance of Bitcoin and other digital assets in the coming weeks and months.
