BTC experienced a rapid decline yesterday afternoon, dropping $3,000 from $98,500, causing many long positions to be liquidated. It is currently fluctuating narrowly above $95,000, having broken through $96,000 multiple times but quickly falling back, without a clear trend.
Initial Jobless Claims Lower Than Expected
On the other hand, the US Department of Labor reported last (26th) night that the number of initial jobless claims in the week ending December 21, seasonally adjusted, fell to 219,000, a decrease of 1,000 from the previous week, and lower than the market expectation of 224,000, the lowest level in nearly a month, indicating that while the labor market is cooling, companies are still avoiding large-scale layoffs, also implying that the Federal Reserve (Fed) may not further cut interest rates.
At the same time, the current overall US unemployment rate is 4.2%, and based on the data of the past decade, while the labor market is trending weaker, the unemployment situation is relatively moderate and has not shown signs of deterioration. Jefferies economist Thomas Simons also stated:
While the pace of hiring has slowed, the pace of layoffs and dismissals has not accelerated in tandem, reflecting companies' increased emphasis on retaining scarce labor.
Fed 91.4% Chance of Pause in January
According to the CME Group's FedWatch tool, the current market expects the Federal Reserve to pause its interest rate cuts in January 2024, with a 91.4% probability of keeping the federal funds rate unchanged in the current range of 4.25% to 4.5%, unchanged from the forecast a week ago.
Economists: US Recession Risk Declines
After the release of the US employment data last night, the US stock market and BTC did not show a significant reaction. As 2024 is about to end, US inflation has almost returned to pre-pandemic levels, and the economy continues to grow, with the labor market still showing resilience, so economists predict that the risk of a US recession will decline, and a soft landing is possible.
However, it is worth noting that a major uncertainty factor next year may be the tariff policies implemented by the elected President Trump, as Goldman Sachs chief economist Jan Hatzius and others pointed out:
The biggest risk is large-scale, comprehensive tariffs, which could severely impact economic growth.
Pantera Founder: Bitcoin Has Reached Escape Velocity
If there is no interest rate cut in January, while it may not be good news for US stocks and BTC, in terms of the long-term trend of BTC, Pantera founder Dan Morehead recently said in an interview that in 2024, BTC has shown completely different performance compared to the past, and has already reached escape velocity, and will not see large-scale retreats again:
In 2013, people were still worried that regulators might ban Bitcoin. The situation in 2024 is completely different, Bitcoin has already reached escape velocity.
Further Reading: Forbes 2025 Forecast: G7 or BRICS Countries May Establish Bitcoin Reserves, BTCFi Grows Significantly, Stablecoin Market Cap Doubles
