Bitcoin (BTC) started the new week on a negative note as major investment banks reassessed their expectations for Federal Reserve (Fed) interest rate cuts following Friday’s strong jobs report.

The leading cryptocurrency by market capitalization fell below $93,000 during European hours, representing a 1.6% drop on the day, according to data source CoinDesk. Prices looked set to test the support zone near $92,000, which has consistently acted as a floor since late November.

The CoinDesk 20 Index, a broader market gauge, fell over 3%, with major coins such as XRP, ADA and DOGE posting bigger losses.

In traditional markets, futures tied to the S&P 500 traded 0.3% lower, pointing to an extension of Friday’s 1.5% decline that pushed the index to its lowest since early November. The dollar index (DXY) approached 110 for the first time since late 2022, with increased government interest rates supporting further gains.

Data released Friday showed nonfarm payrolls rose by 256,000 in December, the most since March, beating expectations of 160,000 job additions and the previous figure of 212,000 by a wide margin. The unemployment rate fell to 4.1% from 4.2%, and average hourly earnings came in slightly lower than expected at 0.3% month-on-month and 3.9% year-on-year.

That prompted Goldman Sachs to push the next rate cut to June from March.

“Our economists now expect the Fed to cut only twice in 2025 (Jun/Dec vs March/Jun/Dec previously), with another rate cut in June 2026,” said Goldman’s Economic Research note to clients on 10. January.

“If December’s FOMC decision marked a significant shift back toward inflation in the Fed’s relative weighting of risks, the December jobs report may have completed the pendulum swing. The soft average hourly earnings number prevented the print from sending a more alarming warming signal, but the case for cutting to reducing risks to the labor market has receded into the background,” explained the note.

The Fed’s rate-cutting cycle began in September, when the official cut benchmark borrowing costs by 50 basis points. The bank delivered quarter-point rate cuts in the following months before pausing in December to signal fewer rate cuts in 2025. BTC is up over 50% since the first rate cut on September 18, hitting record highs above $108,000 at one point.

While Goldman and JPMorgan still expect rate cuts, Bank of America (BofA) fears a longer pause, with risks skewed in favor of a rate hike or renewed tightening. Note that the US 10-year Treasury yield, which is sensitive to interest rate, growth and inflation expectations, has already risen by 100 basis points since the September 18 rate cut.

“We think the tapering cycle is over … Our base case has the Fed on an extended hold. But we think the risks to the next move are skewed toward a rate hike,” BofA analysts said in a memo according to Reuters.

ING said, “The market is right to see the risk of an extended pause from the Fed” in light of the latest economic reports.

“This outlook will only increase if core inflation comes in at 0.3% month-on-month for a fifth consecutive month next week,” ING said in a note to clients over the weekend.

The December Consumer Price Index report is scheduled to be released on January 15. Some observers worry that base effects could accelerate headline CPI and core CPI, adding to the hawkish Fed narrative.