Bitcoin Swings Wildly as Robust U.S. Jobs Data Saps Rate-Cut Expectations

Bitcoin dropped to around $92,000 per bitcoin on Friday as U.S. jobs data sparked a sell-off in bitcoin, crypto and stocks after slashing expectations of Federal Reserve interest rate cuts this year.

The bitcoin price had recovered from a sell-off earlier this week that saw the bitcoin price drop to around $91,500 per bitcoin amid fears of a looming bitcoin price crash.

But, as Tesla billionaire Elon Musk issued a surprise bitcoin price warning, crypto traders were left to assess what the latest changes to Fed rate cut expectations meant for the bitcoin price.

Bitcoin dropped to around $92,000 per bitcoin on Friday as U.S. jobs data sparked a sell-off.© Getty Images

The U.S. economy added 256,000 jobs in December, the biggest monthly increase since March, smashing expectations of 155,000 new jobs. The unemployment rate fell to 4.1%.

The latest data has reinforced the Federal Reserve’s case for holding interest rates steady after cutting them by a full percentage point through 2024, with traders previously betting the interest rate would continue to fall through 2025.

Expectations for higher-for-longer U.S. interest rates also sent bond yields sharply higher, with the 10-year U.S. Treasury yield spiking to its highest level since late 2023 and weighing on equities as the lure of higher returns on bonds makes stocks and risk assets like bitcoin and crypto less attractive.

Bitcoin dropped to around $92,000 per bitcoin on Friday as U.S. jobs data sparked a sell-off in bitcoin, crypto and stocks after slashing expectations of Federal Reserve interest rate cuts this year.

The bitcoin price had recovered from a sell-off earlier this week that saw the bitcoin price drop to around $91,500 per bitcoin amid fears of a looming bitcoin price crash.

But, as Tesla billionaire Elon Musk issued a surprise bitcoin price warning, crypto traders were left to assess what the latest changes to Fed rate cut expectations meant for the bitcoin price.

Bitcoin dropped to around $92,000 per bitcoin on Friday as U.S. jobs data sparked a sell-off.© Getty Images

The U.S. economy added 256,000 jobs in December, the biggest monthly increase since March, smashing expectations of 155,000 new jobs. The unemployment rate fell to 4.1%.

The latest data has reinforced the Federal Reserve’s case for holding interest rates steady after cutting them by a full percentage point through 2024, with traders previously betting the interest rate would continue to fall through 2025.

Expectations for higher-for-longer U.S. interest rates also sent bond yields sharply higher, with the 10-year U.S. Treasury yield spiking to its highest level since late 2023 and weighing on equities as the lure of higher returns on bonds makes stocks and risk assets like bitcoin and crypto less attractive.

"There is a risk that bitcoin dips below $92,000 again, which could worsen bitcoin’s technical sentiment and the price may extend its loss to as low as $80,000," Yuya Hasegawa, bitcoin and crypto market analyst with Tokyo-based Bitbank, said in emailed comments.

"This week saw an aggressive sell-off in bitcoin price from the $103,000 high down to $91,500," John Glover, the chief investment officer of crypto lending platform Ledn, said in emailed comments, adding there could be a dip to between $80,000 to $85,000 if support above $90,000 fails.

While many bitcoin and crypto traders are nervously eyeing the short-term outlook for the bitcoin price and crypto market, others are confident a downturn will be short-lived.

The bitcoin price has dropped back from its recent peak but remains far higher than where it was a year ago.

"With president Donald Trump’s inauguration just 10 days away, volatility is likely to persist across markets," Ryze analysts said, adding: "Short-term challenges notwithstanding, bitcoin's structural drivers—such as institutional adoption and increasing integration into the global financial system—continue to support a bullish outlook for 2025."

Others have, however, remained bullish following the latest U.S. economic data, predicting the outlook could boost the bitcoin price.

"This favorable economic backdrop serves as a significant tailwind for bitcoin, which tends to thrive in an environment of growing investor confidence," Matt Mena, crypto research strategist at bitcoin and crypto investment company 21Shares, said in emailed comments, pointing to "market sentiment firmly in risk-on mode" which could