Bitcoin began the week under pressure as robust U.S. jobs data prompted a reassessment of Federal Reserve (Fed) rate cut expectations among major investment banks. The leading cryptocurrency saw a decline in tandem with risk assets as markets digested the implications of a hawkish Fed stance.
BTC Slides Amid Rate Shift Concerns
Bitcoin (BTC) dropped below $93,000 during European trading hours on Monday, slipping 1.6% to test the $92,000 support zone. This level has held firm since late November but faces renewed challenges as investor sentiment turns cautious.
The broader crypto market also experienced a downturn, with the CoinDesk 20 Index falling over 3%. Altcoins like XRP, ADA, and DOGE recorded even steeper losses, underscoring the widespread impact of the Fed-related repricing.
Jobs Data Surprises, Shaking Market Confidence
Friday’s U.S. jobs report revealed a strong increase of 256,000 nonfarm payrolls in December, far exceeding expectations of 160,000. The jobless rate dipped to 4.1% from 4.2%, signalling a resilient labour market. While average hourly earnings rose less than expected at 0.3% month-on-month, the overall data reinforced concerns about persistent economic strength.
Goldman Sachs responded by delaying its forecast for the next Fed rate cut to June from March. Similarly, JPMorgan trimmed its rate cut expectations, signalling a shift in outlook among top banks.
Fed Policy Uncertainty Pressures Risk Assets
The Federal Reserve’s rate-cutting cycle, which began in September 2024, had initially propelled Bitcoin to record highs above $108,000. However, the recent hawkish tone has dampened enthusiasm.

Bank of America (BofA) expressed doubts about further easing, suggesting the Fed might even consider a rate hike if inflation remains sticky. U.S. Treasury yields, closely tied to interest rate expectations, have surged by 100 basis points since the September rate cut, reinforcing market scepticism about additional cuts.
Upcoming CPI Data in Focus
Investors now await the December Consumer Price Index (CPI) report, due on 15 January, for fresh insights into inflation trends. ING noted that consistent core inflation at 0.3% month-on-month could strengthen the Fed’s hawkish stance.
Base effects may contribute to an acceleration in headline CPI, potentially adding to the narrative that the Fed is far from done with its inflation battle.