The crypto market suffered a sharp decline last night, wiping a good percentage of the recent rally and down to $3.47 trillion, losing nearly 9% of its market value in just a few hours.
Crypto Market Plummets
The sudden decline pushed Bitcoin below the $100K mark again, down by more than 6.3% to
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a current $95.3K price mark.
All major altcoins followed and traded with double-digit declines on Wednesday: Ethereum ($3.33K), Solana ($194), Dogecoins ($0.3421) and Cardano ($0.969). Ripple (XRP) was the only top-10 crypto that stayed more resilient and only declined around 7% to its current $2.28.
The sharp correction saw over $$695.5M liquidated within just 24 hours, according to Coinglass data. Absoliuti dauguma linkviduotu poziciju buvo long pozicijos ($631.3M) lyginant su short pozicijom ($64.21M).
Strong Economic Data Raises Inflation Concerns
Both stocks and cryptocurrencies tumbled as US bond yields surged on stronger-than-expected economic data.
The US job market report showed that job openings in November exceeded forecasts, while another revealed a sharp acceleration in December’s growth across finance, retail, and services sectors.
While the reports ease recession fears and are optimistic for job seekers, they also raise concerns about inflation. A strong economy could prompt the Federal Reserve to delay interest rate cuts, keeping borrowing costs high.
On the Flipside
- Donald Trump’s potential policies, like tax cuts, could lead to higher US government debt. This would likely push bond yields even higher as the government borrows more to cover the increased spending.
- China’s yuan has fallen to its lowest level since September 2023, which could drive more capital out of the country and increase demand for digital assets.
Why This Matters
Rising bond yields make Treasury bonds more attractive, drawing investors away from riskier assets like stocks and cryptocurrencies. This shift can pressure the broader market, leading to sharp declines.
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