The U.S. stock markets were closed on Thursday to honor former President Jimmy Carter, but the crypto market continued to be active and volatile ahead of tomorrow’s December employment report.
Bitcoin (BTC) saw a drop of about 3% in the past 24 hours, hovering just above $91,000. The broader CoinDesk 20 Index also experienced a similar decline, with assets like solana (SOL) and chainlink (LINK) showing double-digit percentage losses.
The recent sell-off in the crypto market follows a strong rally in the fourth quarter of 2024, driven by optimism surrounding Donald Trump’s November victory and expectations of a more favorable regulatory environment in Washington D.C. Additionally, the Federal Reserve’s accommodative monetary policy, which included a 100 basis point cut in the overnight interest rate since September, contributed to the market’s bullish sentiment.
However, recent economic data revealing stronger-than-expected growth and inflation has led to a rise in long-term interest rates by over 100 basis points since the Fed began reducing short-term rates. This shift has raised concerns among investors and traders, prompting a sell-off in the crypto market.
Investors are now awaiting Friday morning’s December jobs report, which could further impact market sentiment. If the report shows continued strength in the economy, it may lead to a revision of expectations for future rate cuts and possibly even pricing in rate hikes in the coming months.
Overall, the crypto market remains highly sensitive to economic data and policy changes, and investors are advised to stay informed and cautious in their trading decisions.