Bitcoin kicked off the week with a drop, falling below $93,000 as fears of a Federal Reserve rate hike rattled markets. According to CoinDesk, the leading cryptocurrency by market value saw a 1.6% dip during European hours, with prices nearing the $92,000 support zone that has held firm since November. This comes after a blowout U.S. jobs report pushed investment banks to rethink their outlook for Fed rate cuts.
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Stronger Jobs Report Alters Fed Expectations
Friday’s nonfarm payrolls report showed a staggering 256,000 job additions in December, far surpassing expectations of 160,000, while the unemployment rate ticked down to 4.1%. Goldman Sachs (GS) responded by delaying its rate-cut forecast to June, stating in a note that the jobs report had “completed the pendulum swing” back toward inflation concerns. Meanwhile, Bank of America (BAC) warned that the Fed might extend its pause or even raise rates, citing rising Treasury yields as a signal of tightening risks.
Cryptocurrency and Broader Markets React
Bitcoin wasn’t the only casualty. The CoinDesk 20 Index, which tracks major cryptocurrencies, dropped over 3%, with coins like XRP and ADA seeing steeper losses. Traditional markets also felt the heat—S&P 500 futures slid 0.3%, extending last week’s losses, while the dollar index (DXY) hit its highest level since late 2022.
At the time of writing, Bitcoin is sitting at $90,578.66.
