Bitcoin News (January 13, 2025) – Bitcoin Struggles After U.S. Jobs Report: Fed Rate Cut Outlook Adjusted
Bitcoin News (January 13, 2025) – Bitcoin (BTC) began the new week on a bearish note, dipping below $93,000 during the European trading hours, marking a 1.6% drop on the day. This decline follows strong employment data from the U.S., which has caused major investment banks to reassess their expectations for future Federal Reserve (Fed) rate cuts. As per CoinDesk, Bitcoin is now testing the $92,000 support zone, a level that has consistently acted as a price floor since late November 2024.
The broader cryptocurrency market also faced losses, with the CoinDesk 20 Index down over 3%. Major altcoins like XRP, ADA, and DOGE recorded even bigger losses, reflecting the overall market sentiment. In traditional markets, S&P 500 futures were down 0.3%, extending Friday’s 1.5% drop, which had pushed the index to its lowest point since early November 2024.
U.S. Jobs Report Drives Shift in Fed Expectations
The key catalyst behind this market shift was the U.S. nonfarm payrolls report for December 2024, which revealed a 256,000 increase in jobs, surpassing the expected 160,000 additions. This data led Goldman Sachs to revise its rate-cut expectations, now predicting only two cuts in 2025, one in June and another in December. Previously, Goldman had anticipated three rate cuts in the year. The U.S. jobless rate also dropped to 4.1% from 4.2%, while average hourly earnings showed a slightly lower-than-expected increase of 0.3% month-over-month.
Impact of Strong Employment Data on Market Sentiment
The strong jobs report has fueled concerns that the Fed may adopt a more cautious approach in reducing rates, with some analysts, including those from Bank of America (BofA), even suggesting the possibility of an extended pause or rate hike. This shift in expectations has led to a more hawkish outlook, weighing heavily on assets like Bitcoin.
Bitcoin has surged over 50% since the first rate cut in September 2024, reaching a record high above $108,000 at one point. However, with expectations for rate cuts now scaling back, the cryptocurrency faces increased market volatility.
As the U.S. consumer price index (CPI) report for December is due on January 15, the market is on edge, fearing that inflationary pressures could reinforce the Fed’s hawkish stance.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment