Bitcoin’s brief climb above $100,000 was short-lived, as the cryptocurrency saw its sharpest drop in over two weeks on Tuesday (January 7). This aligned with a broader sell-off in U.S. stocks triggered by surging Treasury yields fueled by fresh economic data.
Bitcoin dropped 5% to $96,525 by 2:40 p.m. in New York on Tuesday, retreating from Monday’s climb above $100,000 for the first time since December 19. Other major cryptocurrencies also suffered losses, with Ether falling 7.5% and XRP declining nearly 6%.
The decline in Bitcoin deepened as equities turned negative after a two-day rally. A strong Institute for Supply Management report on U.S. service providers revealed a prices-paid measure hitting its highest level since early 2023, alongside data showing U.S. job openings exceeding expectations. Treasury yields spiked across the curve, with the 10-year yield reaching its highest point since May following a $39 billion auction that recorded the steepest yield since 2007.
Bob Wallden, head of trading at digital-assets firm Abra, said that the dip was “combined with profit-taking and stop-loss triggers on fresh crypto longs above $100,000,” according to Bloomberg.
Tuesday’s price reversal followed a surge of investor activity, with a net $987 million flowing into spot-Bitcoin exchange-traded funds on Monday—the largest one-day inflow since November, according to Bloomberg data. This came on the heels of $908 million in inflows during the prior session.
Bitcoin’s record-breaking ascent in 2024 lost momentum in late December as investors moved to lock in profits. Earlier in the year, optimism surrounding a pro-crypto White House under President Trump helped propel the token to a record high of $108,315 in December, fueled by expectations of a favorable regulatory environment in the U.S.
