Bitcoin’s value declined by 0.3% on Monday, reaching $94,268.7. This movement is influenced by ongoing caution surrounding the Federal Reserve’s interest rate outlook and growing market liquidity concerns.

Factors Contributing to Bitcoin’s Decline

1. Strong U.S. Payroll Data

• The U.S. economy recorded 256,000 job additions in December, far exceeding the predicted 153,000. The unemployment rate decreased from 4.2% to 4.1%, indicating robustness in the job market.
• These positive figures imply that the Fed may slow its rate cuts in 2025, bolstering the U.S. dollar and tightening liquidity, both of which are generally bearish for cryptocurrencies.

2. Government Crypto Sales Impact

• Reports reveal that the U.S. Department of Justice has gained approval to liquidate $6.5 billion worth of Bitcoin from the Silk Road case.
• Previous government sales of confiscated Bitcoin have frequently led to increased supply, exerting downward pressure on prices.

3. Challenges from Treasury Yields

• Heightened Treasury yields continue to pose challenges for Bitcoin, with speculation that prices could decline further to around $90,000 if yields persistently remain high.

Broader Market Context

Bitcoin’s recent decline reflects a broader retreat in risk-related assets as traders adapt to shifting monetary policy projections. The prospect of more government crypto sales and global economic uncertainties further feeds the bearish mood.