Cardano’s ADA led losses among the crypto majors on Thursday as bitcoin’s weakness showed no signs of stopping, halting any chance of a rally in altcoins.
Bitcoin (BTC) fell to nearly $93,000 on Wednesday as new economic data sent US treasury yields soaring, leading to a fall in equities. The Institute for Supply Management’s (ISM) latest report on US service providers was stronger than expected, with the price proposal reaching its highest point since early 2023.
It sent other majors spiraling downward. Token prices were flat over the past week as traders took profits in a short-term rally earlier in the week, with ADA, Solana’s SOL, BNB Chain (BNB) and ether (ETH) all falling by almost 10% since Monday.
The broader CoinDesk 20 (CD20), a liquid index that tracks the largest tokens, is down 2.87% in the past 24 hours, a further drop after Wednesday’s 7% plunge.
Meanwhile, options on the broad-based S&P 500 now present greater downside risk than they did a year ago — which could further dampen the chances of a rise in risk assets, including bitcoin, because traders prefer safer investments like bonds.
Defensive positioning in stocks likely stems from concerns that President-elect Donald Trump’s inauguration on January 20 could be a “sell-the-news” event, according to CoinDesk’s Omkar Godbole. Risk-taking has increased in financial markets over the past two months in anticipation of pro-corporate and pro-economy reforms under the incoming presidency of Donald Trump, and profit-taking cannot be dismissed.
Trump’s inauguration on Jan. 20 is widely expected to shift crypto regulations and even a strategic bitcoin reserve in the coming months, both months providing the steps for the next rally.
It’s a view echoed by Singapore-based QCP Capital, which says traders should keep an eye on Friday’s new US economic data ahead of further positioning.
“All eyes are on this week’s FOMC and NFP releases, which are expected to further influence Bitcoin’s price trajectory,” QCP said in a Thursday market broadcast on Telegram. “With market optimism building, we believe Bitcoin’s pullback is just a pause, setting the stage for a bullish rally as Trump’s inauguration boosts optimism.”
The NFP is a monthly report that provides insights into US job creation or loss, excluding farm jobs, reflecting the health of the economy. Strong NFP numbers indicate a stable economy, indicating a possible interest rate hike, which is likely to be bad for risk assets like bitcoin. The weak NFP number suggests rates will remain low or decline, benefiting risk assets.
