Market Downturn and Liquidations
Bitcoin fell below $87,000 on Thursday for the first time since April as traders reassessed Federal Reserve rate cut prospects following the delayed September jobs data release. The largest cryptocurrency by market cap dropped nearly 3% on the day, extending weekly losses to 13.5%.
Bitcoin reached an intraday low of $86,329, marking a 31% decline from the record high above $126,000 set in early October. Crypto market liquidations surged to $933 million across all assets over 24 hours, according to CoinGlass data. Bitcoin led liquidations with $380 million in wiped positions, followed by Ethereum at $239 million.
Ethereum and XRP posted sharper daily declines around 3%, trading at $2,808 and $1.99, respectively. Ethereum dropped 15% over the past week, while XRP losses neared 18% in the same period. Traditional equity markets mirrored the downturn, with the S&P 500 and Nasdaq both falling over 1%.
Federal Reserve Policy Outlook
Interest rate trader sentiment shifted dramatically against a December Federal Reserve rate cut. CME's FedWatch tool shows just 37.6% of traders expect a 25-basis-point cut in December, while over 62% anticipate no change. The odds stood nearly even one week earlier. Prediction market Polymarket reflects similar probabilities, with a 63% likelihood of no change after flipping late Tuesday as optimism faded.
Federal Reserve Chair Jerome Powell attempted to moderate rate cut expectations in late October. September's delayed U.S. jobs report released Thursday, following last week's government reopening, showed 119,000 jobs added during the month. The figure exceeded expectations but failed to provide clarity for market participants.
Economic Data and Market Reactions
Navy Federal Credit Union Chief Economist Heather Long described the September jobs report as mixed on X. She noted encouraging labor force growth of 470,000 people but pointed to 219,000 more unemployed individuals. Long stated the Fed probably will not cut rates in December based on the data.
The combination of weakening rate cut expectations and sustained crypto market pressure pushed digital assets into deeper volatility. Market participants now await clearer Federal Reserve policy signals and additional economic data before positioning for year-end trading. Stock and crypto correlation remained elevated as both asset classes responded to shifting monetary policy outlook and broader liquidity concerns.