The cryptocurrency market experienced a sharp downturn as Bitcoin fell 5% from its recent high of $102,000. This decline pushed Bitcoin down to the $96,500 level, where it remained hours after the initial drop. The retreat came amid stronger-than-expected U.S. job opening data and Federal Reserve projections indicating steady interest rates.

According to the JOLTS report, job openings in the United States rose to 8.1 million in November, an increase from the upwardly revised 7.8 million in October. This robust labor market data dampened hopes for monetary easing, suggesting less urgency for the Federal Reserve to cut interest rates. The CME FedWatch tool projects a 95% probability that the Fed will hold rates steady at its upcoming January 29 meeting.

In reaction to this economic data, the broader crypto market also saw declines. Ethereum dropped 6.4%, XRP fell 4.8%, Solana declined 5.7%, and Dogecoin slid 6.5% over the past 24 hours, according to data from CoinGecko. The meme token Pudgy Penguins experienced the steepest drop at 12.3%.

This market downturn resulted in over $400 million in liquidations, with $275 million occurring within just a four-hour window, based on data from Coinglass. The crypto market had previously gained over 11% in early 2025 before this 5% pullback.

Technical analysis suggests that short-term Bitcoin holders are grappling with profitability challenges amid these volatile price movements. On-chain data indicates a growing percentage of these investors are holding at or near a loss. This struggle could potentially lead to profit-taking, which may hinder Bitcoin’s upward momentum in the near term.

For Dogecoin, the meme-inspired cryptocurrency is currently battling a key resistance level defined by the macro 0.5 Fibonacci extension around the $0.40 price point. Crypto analyst Kevin Doops highlighted this level as a “moment of truth” for DOGE, noting that a successful breach is critical for the token to aim for higher levels.

Prior to this recent decline, Bitcoin had surged to a new all-time high of $108,000. However, the sharp drop from this peak has posed challenges for investors and traders, particularly short-term holders. As the market grapples with shifting dynamics and economic data, volatility has increased, making it more difficult for these investors to maintain profitability.

Despite the current challenges, some experts maintain a long-term bullish outlook for Bitcoin and the broader crypto market. However, the near-term picture remains uncertain as investors navigate the impact of macroeconomic factors and market sentiment.

As the crypto market continues to evolve, investors and traders will closely monitor key economic indicators, Federal Reserve policy decisions, and technical levels to gauge the potential for future price movements. The interplay between these factors will likely shape the trajectory of Bitcoin and other digital assets in the coming weeks and months.