Crypto and traditional markets saw significant declines on January 7, 2025, primarily due to stronger-than-expected economic indicators that could delay planned rate cuts by the Federal Reserve.
Bitcoin fell to $96,909, down more than 5% in the last 24 hours.
The sharp correction saw over $483.44 million in long positions liquidated in just 24 hours, according to Coinglass data. Other major cryptocurrencies followed suit, with Ethereum down more than 8% and Solana down more than 7%.
The catalyst for the current market movement came from two key economic reports. First, the December PMI from the Institute for Supply Management sautéed to 54.1, surpassing November’s 52.1.
On the other hand, the November JOLTS report showed higher than expected job openings, although hiring was down from the previous month. The resignation rate, which reflects worker confidence, fell to 1.9% from 2.1% in October.
These economic indicators have led investors to recalibrate their rate cut expectations, with traders now estimating that there is less than a 50% chance that rates will be cut before June. The Federal Reserve is widely expected to maintain its current rates at its next meeting in January.
The stock market reflected these concerns, with the S&P 500 falling 1.1% and the Nasdaq Composite falling 1.9%. Nvidia shares fell 6.2% despite CEO Jensen Huang announcing new AI initiatives at CES.
