Dogecoin (DOGE) experienced significant losses, leading to a decline among major cryptocurrencies as Bitcoin (BTC) fell to nearly $93,000. This drop was linked to new economic data that caused U.S. Treasury yields to rise sharply.
DOGE dropped by 14%, while other crypto like Solana (SOL), Cardano (ADA), BNB Chain (BNB), and Ethereum (ETH) also saw declines of at least 7%. Bitcoin itself fell by 5.5%.
The downturn in the crypto market mirrored losses in U.S. stocks. A recent report from the Institute for Supply Management (ISM) indicated stronger-than-expected performance in U.S. service providers, with the price-paid measure reaching its highest level since early 2023. Additionally, U.S. job openings exceeded forecasts, leading to a decline in Treasury securities and pushing the 10-year Treasury yield to its highest since May.
Liquidations in crypto markets reached $560 million, marking a significant level at the year’s start. Liquidation occurs when exchanges close traders’ leveraged positions due to unmet margin requirements, creating a cycle of falling prices and further liquidations.
Market analysts view this recent drop as a temporary setback. Vince Yang, CEO of zkLink, noted that stronger job data has dampened hopes for interest rate cuts, but he remains optimistic about future market movements. He believes that such dips can lead to larger bullish trends, especially with a more crypto-friendly U.S. administration on the horizon.
Conversely, QCP Capital warns of potential instability in the crypto markets as January approaches, citing concerns over the U.S. Treasury debt ceiling and the possibility of increased market volatility.
