Bitcoin experienced a 1.5% decline following the release of U.S. macroeconomic data that dimmed expectations for crypto capital inflows. This downturn broke Bitcoin’s streak of 14 consecutive green candles, as markets re-evaluated the likelihood of further interest rate cuts in 2025. The nonfarm payrolls (NFP) data exceeded expectations, indicating a robust labor market and placing risk assets under strain.
Market sentiment suggested that the Federal Reserve might slow its pace of interest rate cuts, dampening the potential for liquidity to bolster crypto markets. CME Group’s FedWatch Tool indicated a mere 2.7% probability of a minor rate cut at the Fed’s January meeting. Traders, including Keith Alan from Material Indicators, noted the market correction attributed to strong economic indicators that reduced anticipated Fed rate cuts.
Alan highlighted the impact of holiday season hiring on the labor data while pointing to the potential influence of incoming policies as Donald Trump assumes the presidency. Meanwhile, Bitcoin found new support levels at $88,000 and $90,000, as observed on Binance’s BTC/USDT order book.
Despite the recent macroeconomic dip, Bitcoin’s trading remained within established support and resistance limits. Analyst Daan Crypto Trades advised traders to zoom out and consider the broader picture amidst these volatile movements. Fellow analyst Rekt Capital remained optimistic, citing a bullish divergence on Bitcoin’s daily relative strength index (RSI) indicator.
Rekt Capital emphasized the historical tendency for Bitcoin bull markets to experience pullbacks post all-time highs, predicting a probable price reversal. He also mentioned that Bitcoin’s current pullback, the first in this cycle, aligns with typical patterns observed in past market recoveries.
