Dogecoin drops 10% as Bitcoin traders see January as a “shaky” period.

Dogecoin (DOGE) led losses among major cryptocurrency companies as Bitcoin (BTC) fell to nearly $96,000, a decline attributed to new economic data that sent US Treasury yields higher.

DOGE shares fell 10%, with Solana’s SOL, Cardano’s ADA, BNB Chain’s BNB and Ethereum (ETH) all down at least 7%. Bitcoin fell 5.5%, while broad-based stocks fell CoinDesk 20 (CD20)The Liquidity Index, which tracks the largest coins by market cap, fell 7.1%.

Futures contracts tracking cryptocurrencies and betting on higher prices saw $560 million liquidated, Show datarecording a relatively high level at the beginning of the year.

Losses in cryptocurrencies track losses in US stocks. The Institute for Supply Management’s (ISM) latest report on US providers was stronger than expected, with a measure of prices paid reaching its highest point since early 2023.

Meanwhile, US job opportunities rose more than expected. These developments led to a decline in Treasury bonds across various maturities, pushing the 10-year Treasury yield to its highest level since May.

Liquidation occurs when an exchange forcibly closes a leveraged trader’s position due to an inability to meet margin requirements. When many traders are forced to sell at the same time due to long liquidations, it creates a cycle in which lower prices lead to more liquidations, which in turn causes prices to fall further.

As such, market watchers see Tuesday’s decline as a long-term weakness.

Vince Yang, CEO and co-founder of zkLink, shared in a message on Telegram: “Markets took a hit yesterday, with Bitcoin and Ethereum falling hard, mostly due to stronger-than-expected US jobs data that dampened hopes for further interest rate cuts this year.” “. “It’s the kind of broader shift in sentiment that we’ve seen before, and nothing unusual for cryptocurrencies.”

“However, we remain optimistic. History shows that these declines often pave the way for larger upward movements, especially with where we are in the market cycle now, and with the emergence of more crypto-friendly governance in the US, there is every reason to believe that we are headed towards some Exciting events, Yang added.

However, Singapore-based QCP Capital sticks to its view of a fragile period for cryptocurrency markets in January.

“It will not be smooth sailing in January, as structural risks loom large,” QCP said in a Telegram broadcast on Wednesday. “The US Treasury’s debt ceiling is expected to be reinstated mid-month, requiring the Treasury to adopt ‘extraordinary measures’ to finance government expenditures.”

“This could lead to market volatility as discussions around the issue intensify,” the QCP added.