Bitcoin only regained its footing and broke through the $100,000 mark on January 6, but unexpectedly collapsed again within a day. How it surged forward the day before is how it fell back last night. Influenced by a series of strong economic data, market expectations for interest rate cuts have cooled, U.S. Treasury yields soared, and along with a simultaneous correction in the U.S. stock market, Bitcoin faced its largest drop in two weeks, falling below the $100,000 threshold again. As a result, it continued to decline today, plummeting to a low of $95,250.

The market’s decline started last night (the 7th) due to unfavorable ISM non-manufacturing PMI and JOLTs job vacancy data.

According to data from the U.S. Institute for Supply Management (ISM), the performance of the U.S. services industry in December exceeded market expectations, with the input price index rising close to a two-year high.

According to the employment data released by the U.S., the job market is surprisingly hot, with a recruitment gap of 8 million. This suggests that the condition of enterprises is quite good, which also means that the previous assertion of 'needing interest rate cuts to save the U.S. economy' is not as important anymore.

Two pieces of data lowered the market’s expectations for interest rate cuts; mainly, the predicted intensity of cuts in March and June has also decreased, contradicting previous expectations of 2-4 cuts in 2025. The market expects a greater than 95% probability that the Federal Reserve will not cut rates in January, causing Bitcoin to plummet in response.

In simple terms: the drop yesterday and today is due to the slowdown in interest rate cuts. Moreover, the slowdown in interest rate cuts relates to Trump’s policies (expelling low-end immigrants and tariffs between the U.S., Canada, and Mexico). Recently, the fluctuations in crypto are largely influenced by the U.S. and Trump, which, in a sense, is a reflection of profits and losses stemming from the same source.

This caused Bitcoin to break through the $100,000 mark yesterday, but it only lasted about 24 hours before quickly falling again. Recently, Bitcoin had reached a high of nearly $103,000 as many enterprises increased their investments and institutional investors recouped funds. However, the bulls failed to maintain the upward momentum, coinciding with the release of the employment report which was better than expected, leading to a gradual price decline, ultimately dropping to the $95,000 range.

What we need to focus on next is: where will Bitcoin drop to?

Bitcoin has fallen back into the oscillation range of $90,000-$100,000. If it cannot hold $95,000, structurally it will retest the support at $90,000. I’ve mentioned before that $90,000 cannot be broken; as long as it doesn’t break $90,000, it’s fine. If it breaks below $90,000, there will be a stampede selloff in Bitcoin, which will wipe out a large number of people!

If there’s a rebound today, and it rebounds to around $99,000, then that will be our reduction position. If there’s no rebound, or if after a rebound it falls below $97,000 again, then the next target is $91,000. A further target could be $86,000, which is also a starting point for the rise.

If we reduce our positions, we will do so significantly at $99,000; the same applies to other cryptocurrencies. Bitcoin’s situation this time is quite different; it won’t replicate the previous cyclical narrative. It’s more likely that BTC will alternate between corrections and rebounds, making it hard to feel like the previous thorough downturns.

Currently, BTC has dropped to around $95,000, but it hasn’t broken its bottom; it may not be the lowest point yet. If it truly breaks below $95,000, everyone can basically buy in batches with their eyes closed! If you don’t have a position yet, don’t rush to chase highs or panic sell!

Next, we need to pay attention to the economic data and Federal Reserve meetings at the following time points:

1, January 8

U.S. December ADP employment figures (21:15), and the initial jobless claims data for the week will be released (21:30). Last night’s job vacancy and PMI data led traders to no longer fully price in an interest rate cut before July by the Federal Reserve.

2, January 9

The Federal Reserve will release the minutes of the December monetary policy meeting (03:00)

3, January 10

U.S. December seasonally adjusted non-farm employment (10,000) (21:30)

U.S. December unemployment rate (21:30)

4, January 15

U.S. CPI data released

5, FOMC meeting on January 29

If these data and meetings convey a more hawkish message (low likelihood of interest rate cuts), Bitcoin may further drop below $91,500, and risks must be noted.

Is the altcoin bull still there?

This drop was completely unanticipated and impossible to judge. Bitcoin broke through $100,000, and altcoins did not follow, but when it fell below $100,000, altcoins also collapsed!

But you should know that the market is still in a recovery phase, and the rebound of altcoins is relatively limited, for the following reasons:

Bitcoin is draining: all the funds are being absorbed by Bitcoin.

Primary market diversion: AI projects have siphoned off some funds.

Lack of new narratives: the market has no new hotspots.

This market is quite exhausting, but don’t worry, it doesn’t mean that opportunities are gone! Remember that trading requires patience and strategy, not just following the crowd. Right now, we need to wait for Ethereum to rise before the sentiment for altcoins can fully open up. So there’s no need to panic; the key is to position yourself well, hold your chips, and wait patiently for opportunities!

This week, there are actually quite a few macro data points that will somewhat influence market trends, especially the data on Thursday and Friday; be cautious about taking timely profits during swings.