Investing.com-- Bitcoin edged lower on Monday, falling for a third straight day as stronger-than-expected U.S. payroll data stoked caution among traders, reinforcing the Federal Reserve’s view of fewer interest rate cuts in 2025.
Bitcoin fell 0.3% to $94,268.7 by 01:12 ET (06:125 GMT).
Bitcoin prices fell sharply last week, having declined six out of the previous seven sessions as potential token sales by the U.S. government eroded sentiment towards crypto.
US rate jitters spark liquidity concerns
Robust U.S. employment data released on Friday has backed the Federal Reserve's forecast of fewer rate cuts this year. In December, the U.S. economy added 256,000 jobs, surpassing forecasts of 153,000, and the unemployment rate declined to 4.1% from 4.2% in November.
This strong labor market performance suggests that the Fed may adopt a more cautious approach to monetary easing.
Higher interest rates can exert downward pressure on Bitcoin and other cryptocurrencies, as they often lead to a stronger U.S. dollar and reduced liquidity in financial markets.
Additionally, elevated Treasury yields have been associated with declines in Bitcoin's price, with some analysts suggesting that sustained high yields could push Bitcoin's value down to around $90,000.
Bitcoin pressured by reports of govt selling
Another factor influencing Bitcoin's market dynamics is the potential for government sales of seized cryptocurrencies.
Last week, media reports emerged saying that the Department of Justice had received court approval to sell about $6.5 billion worth of Bitcoin confiscated from the Silk Road black market.
The U.S. government has previously liquidated Bitcoin assets acquired through law enforcement actions, and the possibility of future sales could introduce additional supply into the market, potentially impacting prices.
This also likely opposes the idea of a strategic Bitcoin reserve under the Donald Trump administration, further weighing on the token.
Crypto price today: most altcoins record sharper declines than Bitcoin
In the broader cryptocurrency market, Bitcoin's performance continues to influence other digital assets.
World no.2 crypto Ether fell 1.6% to $3,229.02.
Bucking the trend, world no.3 crypto XRP rose 3.8% to $2.5139.
Solana fell 1.3%, and Polygon declined 4.8%, while Cardano slumped 6.2%. Among meme tokens, Dogecoin lost 3.2%.