Bitcoin (BTC) remains the center of investors’ attention and concern, especially after the crisis most recent non-farm payroll data from the US Bureau of Labor Statistics (BLS). While overall market sentiment remains bullish, recent developments in the US economy indicate that macroeconomic factors could be against the leading cryptocurrency in 2025.
Currently, Bitcoin is trading above $94,000 following another turbulent price trend that saw a loss of 3.45% over the past seven days.
The Fed’s rate-cutting trajectory is dead – analysts
In one X message On December 10, market experts from global capital market analysis firm The Kobeissi Letter dissected the employment situation overview for December 2024. According to the BLS, employment in the non-farm wage sector increased by 256,000 jobs this month, representing an additional 100,000 jobs on top of the general predicted figures. .
Following this report, analysts at The Kobeissi Letter highlight that the US economy has gained an average of 165,000 jobs since July, which is the highest six-month average since July 2024.
Given that the US Federal Reserve began implementing interest rate cuts from September 2024, citing a reduction in job growth and inflation, The Kobeissi Letter analysts suggested that the Apex Bank’s approach may have been misleading in light of recent developments.
Therefore, the Fed is expected to pause rate cuts to counter expected higher inflation due to strong employment data, with the potential to even hike rates.
Overall, the lack of rate cuts or the introduction of rate hikes is negative for Bitcoin, as lower interest rates provide investors with the opportunity to trade risky assets such as cryptocurrencies. Following the Fed’s earlier announcement of possible lower interest rate cuts in 2025, Bitcoin experienced a sudden crash of more than 9% in mid-December as investors looked to close their volatile positions across financial markets.
Currently, The Kobeissi Letter predicts that the Fed’s rate cuts are likely over, with a 44% probability that there will be no rate cuts through June 2025.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $94,028, reflecting a gain of 0.22% in the past 24 hours. Meanwhile, the major cryptocurrency has fallen 3.72% and 6.35% over the past seven and thirty days, respectively.
Despite the potential for reduced interest rate cuts in 2025, Bitcoin investors will likely maintain bullish sentiments due to other factors, including historical price performance in a bull cycle, an expected pro-crypto US government, and continued institutional investment through the spot ETFs.
With a market capitalization of $1.84 trillion, Bitcoin remains the largest cryptocurrency and the eighth largest asset in the world.
Featured image from Investopedia, chart from Tradingview