$BTC
Bitcoin's daily plunge of 12% nearly halved this year! Liquidation and panic selling triggered, non-farm payrolls become the next key
Bitcoin's daily collapse of 12% brings its year-to-date decline close to 50%. The forced liquidation of leveraged accounts across the network triggered a chain reaction, leading to an epic market crash in the crypto space! On the same day, U.S. economic data added to the gloom, with initial jobless claims last week exceeding expectations and previous values at 231,000. The January non-farm payroll report has been delayed until the 11th due to the government shutdown, and the uncertainty during this data vacuum has fully fermented market pessimism. Traditional markets like U.S. stocks and crude oil have also been dragged down, with panic spreading across markets.
Trump's nomination of Waller as Federal Reserve Chairman became a market catalyst, with his balance sheet reduction stance interpreted as hawkish and bearish, directly causing both precious metals and Bitcoin to plummet simultaneously. However, analysts insist that the market has a serious misunderstanding of Waller; this round of decline is fundamentally due to excessive speculation in the crypto market followed by leveraged liquidation, with the negative feedback from forced liquidation being the core driving force. Currently, U.S. dollar liquidity is under pressure, and the Federal Reserve is still lightly expanding its balance sheet to avoid a liquidity crisis, while reducing the balance sheet contradicts the goal of lowering long-term interest rates, and the U.S.'s high debt also provides no foundation for the balance sheet reduction plan.
In fact, Waller's stance has long since turned dovish, publicly supporting interest rate cuts in the second half of 2025, and suggesting coordination between the Fed and the Treasury for bond issuance, while Trump’s core demand for the nomination is rapid interest rate cuts. The market generally expects the Fed to cut rates for the first time in June this year, with two 25 basis point cuts expected throughout the year.
In the short term, global market fluctuations are unlikely to cease, and the January non-farm payroll data to be released next Wednesday will be a key indicator. If the data falls short of expectations, the crypto market may face a new round of turmoil. Do you think this round of decline is driven by hawkish expectations or by leveraged liquidation? Will next week's non-farm payrolls signal the market's bottom? Share your thoughts in the comments!
