US stock markets were closed on Thursday in memory of former President Jimmy Carter, but crypto is 24/7 bearing the brunt of any jitters ahead of tomorrow’s December employment report.
In late afternoon action, the price of bitcoin (BTC) had returned to levels not seen in more than a month, barely holding above $91,000 and falling about 3% over the past 24 hours.
The broader CoinDesk 20 index is down similarly, but notable underperformers include solana (SOL) and chainlink (LINK), both down double-digit percentages.
The continued crypto sell-off comes after a major rally in the fourth quarter of 2024 spurred by Donald Trump’s victory in November and hopes for a friendlier regulatory environment from Washington DC
Another leg of the stool supporting crypto was easier monetary policy, with the US Federal Reserve cutting its overnight interest rate by 100 basis points since September. However, that leg has been cut after a series of economic reports showed that the economy and inflation have been far stronger than markets and the central bank expected. That, in turn, has sent long-term yields higher by more than 100 basis points since the Fed began trimming short-term yields.
Today’s sales come ahead of Friday morning’s December jobs report. Another in a long line of strong economic data could prompt markets to not just scrap the idea of any rate cuts in 2025, but perhaps begin to price in the need for rate hikes in the coming months.
How low could bitcoin fall?
“BTC, ETH and SOL are now going through the lows of the December 5 range and people are starting to accept the fact that these levels may not hold,” said well-followed trader Eugene Ng Ah Sio in an X post. “This is where most people start to panic.”
He said that the next support level for bitcoin is $85,000 if the $90,000 level falls.
Joe McCann, founder of venture capital fund Asymmetric Capital, wrote that BTC could target $75,000 in case bitcoin fails to hold the $90,000 line.
Prominent trader Skew said Thursday’s lower prices could have been driven by headlines regarding additional Silk Road-related bitcoin sales. In a separate post analyzing Binance order book data, Skew said that bid liquidity ready to buy up bitcoin below current prices is robust and outweighs sellers.
“Something to note here is the lack of volatility behind the price here, which is partly the selling flow not being significant and the amount of bid liquidity offsetting the current selling pressure,” Skew said. “This doesn’t look too bad.”
