$300M in Crypto Liquidations as Bitcoin Drops Under $98K on Strong U.S. Economic Indicators.

Bitcoin Slides Below $98K as Robust U.S. Economic Data Sparks Rate Cut Reassessment

Bitcoin (BTC) dropped under the $100,000 level on Tuesday as stronger-than-anticipated U.S. economic reports cast doubt on the likelihood of near-term Federal Reserve rate cuts, dampening enthusiasm across crypto markets.

November’s JOLTS job openings unexpectedly rose to 8.1 million from 7.8 million in October, surpassing expectations of 7.7 million, according to the Bureau of Labor Statistics. Simultaneously, the ISM Services PMI jumped to 54.1 in December, above the forecasted 53.3 and well ahead of November’s 52.1. The Prices Paid subindex soared to 64.4, reflecting persistent inflationary pressures in the services sector.

In response, the 10-year U.S. Treasury yield climbed to 4.68%, nearing multi-year highs, while the Nasdaq fell over 1% and the S&P 500 shed 0.4%. Bitcoin, which had traded near $101,000 earlier, sank to $97,800, a 4% drop within 24 hours. Major altcoins saw sharper declines, with Ethereum (ETH) and Solana (SOL) falling 6%-7% and Avalanche (AVAX) and Chainlink (LINK) tumbling nearly 9%.

The sharp market move triggered approximately $300 million in long-position liquidations across crypto derivatives markets, according to CoinGlass.

The economic data also reshaped expectations for Federal Reserve monetary policy. Market participants now see a reduced likelihood of a rate cut in 2025, with the probability of easing in March falling to 37% from nearly 50% last week, based on CME FedWatch data. Expectations for further rate cuts later in the year have also been significantly scaled back.

Analysts caution that bitcoin’s near-term trajectory may remain under pressure if Treasury yields continue to rise or if further strong economic data supports a more hawkish Fed stance. As macroeconomic conditions take center stage, crypto markets are likely to remain highly sensitive to shifts in investor sentiment.