Markets decline on hotter-than-expected economic data, with Bitcoin shedding over 5%.
The crypto and traditional markets experienced significant declines on January 7, 2025, primarily driven by stronger-than-anticipated economic indicators that could delay anticipated Federal Reserve rate cuts.
Bitcoin dropped to $96,909, marking an over 5% decline in the past 24 hours.
The sharp correction saw over $$483.44M in long positions liquidated within just 24 hours, according to Coinglass data. Other major cryptocurrencies followed suit, with Ethereum falling over 8%, and Solana declining over 7%.
The catalyst for today's market movement came from two key economic reports. First, the Institute for Supply Management's December PMI jumped to 54.1, surpassing November's 52.1.
On the other hand, where November's JOLTS report showed higher-than-expected job openings, though hiring decreased compared to the previous month. The quit rate, which indicates worker confidence, fell to 1.9% from October's 2.1%.
These economic indicators have led investors to recalibrate their rate-cut expectations, with traders now seeing less than a 50% chance of rate cuts before June. The Federal Reserve is widely expected to maintain current rates at its upcoming January meeting.
The stock market reflected these concerns, with the S&P 500 falling 1.1% and the Nasdaq Composite dropping 1.9%. Nvidia shares tumbled 6.2% despite CEO Jensen Huang's announcement of new AI initiatives at CES.
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