Due to the impact of U.S. employment data suppressing interest rate cut expectations, the price of Bitcoin has dropped below $86,000, reaching a seven-month low, a 32% pullback from its peak.

On Thursday, the latest U.S. employment report showed that inflationary pressures persist, causing the price of Bitcoin to fall to a recent low. As of 11:50 PM Eastern Time on Thursday, Bitcoin, the world's largest crypto asset, fell by 7.32% in the past 24 hours to $85,700. This is the lowest point in nearly seven months, down 32% from the all-time high of $126,080 set last October.

The Crypto Assets Fear and Greed Index remains at 11, indicating “extreme fear” in the market, while the market continues to decline further. In the past 24 hours, the entire crypto assets market has fallen by 6.62%.

Vincent Liu, Chief Investment Officer of Kronos Research, stated: “Bitcoin fell below $85,500 due to stronger-than-expected U.S. employment data that weakened the market's expectations for a rate cut in December. Liquidity remains weak, and short-term profit-taking has exacerbated the decline. The market is reassessing risk and reacting to macroeconomic data.”

Higher than expected inflation indicators have raised concerns about the Federal Reserve potentially pausing its easing cycle, which would add additional downward pressure to the Crypto Assets market. The CME Group's FedWatch tool currently shows a 35.4% probability that the Federal Reserve will cut rates by 25 basis points next month.

Liu said: “Everyone's attention is focused on the possible interest rate cut in December, but most of the factors may have already been digested by the market. Bitcoin will rebound after the interest rate cut, but to achieve sustained growth, new capital inflows or a recovery in on-chain demand are needed.”

This Kronos Research analyst stated that the market needs not only the Federal Reserve to pause quantitative tightening but also new capital, strong on-chain demand, and a shift in market sentiment. Liu said, “Without these four indicators, any rebound may fail.”

At the same time, LVRG research director Nick Ruck stated that the current market adjustment is a “healthy reassessment” of the overly expanded positions after last month's price increase. “On-chain indicators show that selling pressure in spot and futures is stabilizing, indicating that capitulatory selling is about to end.” (The Block)