Bitcoin $92,802.9 (BTC) started the week with a decline. Strong employment data announced on Friday reshaped expectations for a Federal Reserve (Fed) interest rate cut. As a result of these events, the largest cryptocurrency fell below 93 thousand dollars and lost 1.6 percent of its value. This left investors worried about a possible larger pullback.
“The Fed’s Foot Will Be on the Brake for a Long Time Regarding Interest Rates”
According to the data announced on Friday last week, in December non-farm employment It increased by 256 thousand, well above expectations. While strong employment growth reduced the unemployment rate to 4.1 percent, hourly earnings were below expectations at 0.3 percent monthly and 3.9 percent annually.
Following the announcements, Goldman Sachs announced that the Fed postponed interest rate cuts until June. The bank reduced its previously predicted three interest rate cuts for 2025 to two.
Goldman Sachs In the investor note he shared, “The Fed prioritizes the inflation risk. “The weak growth in earnings has overshadowed the need to reduce risks to the labor market.” The Fed paused the interest rate reduction cycle in December, which it started in September. During this period, Bitcoin reacted positively to interest rate cuts and gained over 50 percent in value.
BofA: Fed May Raise Interest Rates
Bank of America (BofA) stated that the Fed is likely to increase interest rates in the next step. The bank emphasized that 10-year US bond interest rates have increased by 100 basis points since September. According to BofA’s analysis, the rate-cutting cycle is over and the Fed is expected to remain on hold for a long time. However, attention was drawn to the risk that the next move could be an interest rate increase.
All eyes are currently on the December consumer price index data, which will be announced on January 15. The data is seen as very important as it could provide new clues that could influence the Fed’s policy. In light of available data, analysts cryptocurrency marketHe predicts that high volatility will continue.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
