US stock markets were closed on Thursday in memory of former President Jimmy Carter, but crypto is operating 24/7 and experiencing all the jitters ahead of tomorrow’s December jobs report.
By late afternoon, the price of Bitcoin (BTC) had returned to levels not seen in over a month, barely holding above $91,000 and down about 3% over the of the last 24 hours.
The broader CoinDesk 20 index is down similarly, but notable underperformers include Solana (SOL) and Chainlink (LINK), both down by double-digit percentages.
The continued crypto sell-off follows a major rally in the fourth quarter of 2024, spurred by Donald Trump’s victory in November and hopes for a friendlier regulatory environment in Washington DC.
Another thing crypto has been relying on has been looser monetary policy, with the US Federal Reserve cutting its overnight interest rate by 100 basis points since September. That step was removed, however, after a series of economic reports showed the economy and inflation were much stronger than markets and the central bank expected. That in turn has pushed long-term interest rate yields up more than 100 basis points since the Fed began cutting short-term rates.
Today’s sales come ahead of Friday morning’s December jobs report. Another in a long line of strong economic data could lead markets not only to abandon the idea of any rate cuts in 2025, but perhaps to start pricing in the need for rate hikes in the months ahead.
How Far Could Bitcoin Fall?
“BTC, ETH and SOL are now revisiting the December 5 lows and people are starting to accept the fact that these levels may not hold,” said well-followed trader Eugene Ng Ah Sio in an article that’s when most people start to panic.”
He said the next support level for Bitcoin would be $85,000 if the $90,000 level declines.
Joe McCann, founder of venture capital fund Ametric Capital, said BTC could target $75,000 in case Bitcoin fails to maintain the $90,000 mark.
Prominent trader Skew said Thursday’s price drop could have been driven by headlines about additional Silk Road-related bitcoin sales. In a separate article analyzing Binance order book data, Skew said the liquidity of offers ready to buy Bitcoin below current prices is robust, outpacing sellers.
“Of note here is the lack of volatility behind prices, which is partly explained by the fact that the sales flow is not strong and the amount of liquidity in the bids exceeds the current selling pressure” , said Skew. “It doesn’t look so bad.”
