Bitcoin prices dropped roughly 10% in the last few days.
Bitcoin prices have declined this week, dropping below $93,000 earlier today after robust economic data provoked concerns that Federal Reserve officials will have to cut rates more slowly.
The world’s most valuable digital currency by total market capitalization fell to $92,500 this afternoon, according to Coinbase data from TradingView. At this point, it had fallen approximately 10% after reaching as much as $102,700 on Monday, January 6.
“The recent decline in Bitcoin prices can be attributed to several factors based on recent economic data,” Marc P. Bernegger, cofounder of crypto fund of funds AltAlpha Digital, said via email.
“Strong U.S. job data and PMI figures released recently have led to a reassessment of expectations regarding interest rate cuts by the Federal Reserve for 2025,” he continued.
“This adjustment in market expectations has contributed to a rise in U.S. Treasury yields, which often inversely correlates with risk assets like Bitcoin, leading to a sell-off in cryptocurrencies,” Bernegger added.
“The positive economic data suggested a more conservative approach to monetary policy, thereby reducing the appeal of speculative assets like Bitcoin,” the analyst concluded.
Brett Sifling, wealth manager for Gerber Kawasaki Wealth & Investment Management, offered a similar take.
“The recent data released this week suggested continued economic strength in the U.S., which sent bond yields higher and caused the equity market to pull back slightly,” he said through emailed comments.
“The higher that yields go, investors are less willing to put money to work in risk-on assets like bitcoin. Combined with Bitcoin’s correlation to U.S. technology stocks, I think this is the main reason crypto has declined this week,” said Sifling.
Jacob Joseph, senior research analyst for CCData, also weighed in, indicating through email that “2025 has started slowly for the crypto industry. Bitcoin has continued to trend downward since the beginning of the week, mirroring the movements of the U.S. stock market.”
“Equity indices have reached weekly lows, influenced by positive job reports that might sway the Federal Reserve’s stance to ease up on interest rate cuts ahead of the FOMC minutes release. This, coupled with rising treasury bond yields, has contributed to the decline in risk-on assets, including Bitcoin,” he stated.
“Investors typically exercise caution before significant data releases, such as FOMC minutes and the upcoming Non-Farm Payrolls and Unemployment Rate reports on Friday,” the analyst added, highlighting future developments that market observers will likely monitor.
Sifling also offered his viewpoints on the key matters that traders need to follow, emphasizing that “Friday’s job report and next week’s inflation data will be key factors to watch ahead of the next Fed meeting later this month.”
“At this point, there is little to no hope for a rate cut for the 4th straight Fed meeting, however market participants will be looking for Powell to set expectations for the next meeting in March and the year ahead,” he stated.
“If inflation stays under control and we get more rate cuts this year, the all-time high for Bitcoin will be on watch for a potential continued breakout,” noted Sifling.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
