Bitcoin Slides Below $100K Amid Strong U.S. Labor Data, Market Shifts

Bitcoin (BTCUSD) saw a sharp decline Tuesday following robust U.S. labor market data that highlighted the economy's resilience, dampening expectations for Federal Reserve interest rate cuts.

By late Tuesday afternoon, Bitcoin was trading at $97,000, down from its overnight peak of nearly $103,000. This marked a retreat after the digital currency briefly surpassed the $100,000 threshold on Monday, a level not seen in almost three weeks.

The market's shift reflects broader concerns about rising interest rates. High-yield investments like bonds become more attractive in such conditions, reducing the appeal of risk-on assets, including cryptocurrencies. Despite the Federal Reserve's recent three consecutive rate cuts—the first in four years—the central bank has signaled caution, indicating slower cuts ahead amid persistent inflationary pressures.

Other cryptocurrencies experienced steeper declines on Tuesday. Ethereum (ETH) dropped 8%, while Solana (SOL) lost over 7% within 24 hours. Meanwhile, Bitcoin ETFs saw significant inflows, with nearly $1 billion entering on Monday, aligning with Bitcoin's temporary price surge. Ethereum ETFs also attracted $128.7 million in investments, according to Farside Investors.

Crypto-related stocks mirrored the downturn. MicroStrategy (MSTR), a major holder of Bitcoin, fell by 10%. Coinbase Global (COIN), a leading crypto exchange, dropped 8%, while Bitcoin mining company Marathon Holdings (MARA) slid 7%.

As investors weigh inflationary risks and the Federal Reserve’s evolving stance, the cryptocurrency market faces ongoing volatility, leaving analysts to speculate on its next moves.