Bitcoin dropped to an intraday low of $86,329, representing a 31% decrease from its peak of over $126,000 in early October.
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On Thursday, Bitcoin fell below the $87,000 mark for the first time since April, as traders recalibrated their expectations regarding a potential interest rate cut from the Federal Reserve. This was influenced by delays in the September jobs report. The largest cryptocurrency slipped nearly 3% on the day, compounding its weekly decline to 13.5%.
Having reached an intraday low of $86,329, Bitcoin is now down 31% from its earlier record. Data from CoinGlass indicates that liquidations in the cryptocurrency sector surged to $933 million across all assets within just 24 hours. Bitcoin accounted for the most significant portion, with $380 million in liquidated positions, followed by Ethereum at $239 million.
Both Ethereum and XRP experienced sharp daily declines of roughly 3%, trading at $2,808 and $1.99, respectively. Over the past week, Ethereum has lost about 15%, while XRP suffered an almost 18% drop. Traditional stock markets mirrored this economic downturn, with the S&P 500 and Nasdaq falling more than 1%.
Trader sentiment regarding interest rates has shifted notably in light of the Federal Reserve’s actions. Currently, only 37.6% of traders anticipate a 25 basis point rate cut in December, whereas over 62% expect rates to stay the same, based on data from CME’s FedWatch tool. This marks a change from just a week ago when expectations were nearly split. Similarly, prediction markets like Polymarket show a 63% chance of rates remaining unchanged after the earlier enthusiasm began to wane.
Federal Reserve Chairman Jerome Powell tried to temper hopes for cuts later this month. The delayed jobs report for September, released Thursday, showed an increase of 119,000 in payrolls, exceeding expectations, yet it did little to clarify the situation for market participants.
Heather Long, the chief economist at Navy Federal Credit Union, described the employment report as mixed. She pointed out an accelerated labor force growth of 470,000, although unemployment also rose by 219,000. Based on this data, she suggested that a rate cut from the Fed in December is unlikely.
As expectations for rate cuts diminish, the cryptocurrency market sees further volatility. Investors are now looking for clearer policy indicators from the Federal Reserve and additional economic data to inform their year-end trading strategies. The relationship between equities and cryptocurrencies continues to intensify as both markets react to shifts in monetary policy and broader liquidity issues.
