Why is Bitcoin price down today?
Bitcoin has dropped by over 3% below $91,000 on Jan. 13, mirroring declines across the riskier assets as traders trimmed their bets on the Federal Reserve interest rate cuts in 2025.Strong US payroll data pushes Bitcoin lower On Jan. 10, the US Bureau of Labor Statistics reported a 256,000 increase in nonfarm payrolls, surpassing most forecasts in a Bloomberg survey. The unemployment rate dropped unexpectedly to 4.1%, while average hourly earnings rose 0.3% in December.Annual revisions showed the July unemployment peak, initially reported at 4.3%, was revised lower, indicating a stronger labor market during the summer. The figures reinforce the Fed’s cautious approach, with policymakers projecting just two rate cuts for 2025 as they face challenges in achieving their 2% inflation target.Bond traders, for instance, do not see a rate cut happening until September, according to CME data.Higher interest rates increase the opportunity cost of holding yield-bearing assets like the US Treasury. In turn, traders’ appetite for riskier assets like cryptocurrencies and stocks decline. Bitcoin’s decline today, therefore, is part of the growing risk-off sentiment, evidenced further by declines across the top US stock indexes. On the other hand, yields on both short-term and long-term US Treasury bonds have increased.Upcoming consumer and wholesale price reports on Jan. 14 and 15 will provide further insights into inflation trends ahead of the Fed’s policy meeting on Jan. 28-29.According to the University of Michigan's preliminary January survey, Americans expect prices to rise at an annual rate of 3.3% over the next five to 10 years, up from 3% in December. Short-term expectations have also increased, with consumers predicting a 3.3% rise in costs over the next year, a 0.5 percentage point jump from the previous month. Sticker inflation, therefore, could limit the Fed’s probability of slashing rates in the coming months, a reason why the Bitcoin market is now leaning bearish.Bitcoin NUPL hints at bearish reversal Bitcoin’s Net Unrealized Profit/Loss (NUPL) indicator has entered the "Belief—denial" zone, a level historically associated with local market tops. This metric measures the unrealized profit or loss of Bitcoin holders, and reaching this zone often signals heightened optimism in the market.As Bitcoin hovers in this zone, selling pressure from profit-taking investors appears to be driving prices lower. Holders who accumulated during earlier stages of the rally may be cashing in, leading to increased supply that’s putting downward pressure on BTC price. Historically, the "Belief — denial" phase often precedes corrections as market sentiment begins to shift. The current decline in Bitcoin’s price may reflect these dynamics, with traders bracing for further consolidation or potential downside in the near term.Bitcoin H&S pattern hints at $76,750Bitcoin's price decline today is part of its prevailing head and shoulders (H&S) pattern. The H&S pattern is a classic technical analysis formation that signals a potential trend reversal. It consists of three peaks: the highest in the middle (head) flanked by two lower peaks (shoulders). The neckline, drawn along the support level connecting the troughs between the peaks, serves as a key trigger point. If the price breaks below the neckline, it typically confirms the bearish reversal, with a measured target derived from the distance between the head's peak and the neckline.In Bitcoin's case, the pattern has developed over the past few months, with the left shoulder forming in mid-November, the head peaking in early December, and the right shoulder shaping through late December to early January. Currently trading near $91,750, Bitcoin risks falling below the neckline support at approximately $91,000. If this pattern plays out, the projected downside target lies near $76,750, reflecting the pattern's height subtracted from the neckline. Additionally, the relative strength index (RSI) near 41 indicates bearish momentum but still leaves room for further declines before the oversold threshold of 30 is reached.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.