This decline was triggered by a 5% decline in the price of Bitcoin and rising expectations that the Federal Reserve (Fed) would adopt a more hawkish stance. Bitcoin surpassed the $102,000 level on January 6, giving investors hope for a market rally.

However, this rise was short-lived due to the increase in bond yields and investors acting cautiously before the economic data from the Fed. Bitcoin price dropped 5.7% in 24 hours to $96,145.

The increase in US bond yields increased expectations that the Fed would adopt a more hawkish approach to interest rate policies. Authorities stated that they planned only two interest rate cuts for 2025, signaling a more limited easing policy compared to previous expectations.

Investors are now focused on the Fed meeting minutes, which will be released on Wednesday, January 8. These minutes can provide more information about the Fed’s interest rate decisions and economic evaluations.

Additional pressure on the Bitcoin price came from job posting data released by the US Department of Labor on January 7. According to the report, job postings increased to 8.1 million in November with the increasing demand in the services sector. This figure surpassed the expected expectation of 7.7 million and the previous month’s data of 7.8 million.

The non-farm employment report to be announced on Friday will be another important data for investors. Stronger-than-expected employment data may strengthen expectations that tight monetary policy will continue.

A resilient labor market could lead to continued inflationary pressures. This situation led investors to move away from crypto assets, causing large outflows in Bitcoin ETFs.

There were only $52.9 million total inflows into Bitcoin ETFs on January 7. This figure represents a 94% decrease compared to the $987 million inflow recorded the previous day.

According to the data, BlackRock’s spot Bitcoin ETF, called IBIT, was the only ETF to record inflows that day, offsetting outflows from other ETFs with $596.11 million. In contrast, ARK and 21Shares’ ARKB ETF suffered the biggest loss, recording an outflow of $212.55 million.

Grayscale’s Bitcoin ETFs, codenamed GBTC and BTC, also experienced an outflow of $125.45 million and $113.85 million, respectively. Fidelity’s FBTC ETF lost $86.29 million, while Franklin Templeton’s EZBC fund outflowed $5.58 million. Other Bitcoin ETFs reported “0” inflows and outflows that day.

The decline in Bitcoin price has reduced investors’ appetite for high-risk assets. The pressure on the market increased further with the liquidation of a $300 million long position opened in crypto derivatives markets with bullish expectations.

As of January 7, the total trading volume of Bitcoin ETFs rose to $4.62 billion, surpassing the $3.96 billion volume the day before. At the time of writing this news, Bitcoin was trading at $96,145.