Continued Crypto Market Decline Ahead of US NFP Report

The cryptocurrency market is experiencing a downturn as investors brace for the upcoming U.S. non-farm payroll data. Bitcoin and Ethereum prices have decreased significantly, and traders are closely monitoring these developments, which could influence Federal Reserve decisions regarding interest rates.

Key Takeaways

Cryptocurrency prices tumble as anticipation builds for the U.S. non-farm payrolls report.
Bitcoin's price dropped to $89,344 from a high of $94,500, while Ethereum fell below $3,057.
Market capitalization fell by 1.2% in 24 hours, now exceeding $3.17 trillion.
Daily trading volume decreased by 17%, indicating reduced market activity.
Liquidations have exceeded $477 million, with Bitcoin and Ethereum facing the highest losses.
Demand for Bitcoin and XRP ETFs has diminished, contributing to asset outflows.

Crypto market crash continues ahead of the US NFP report - 1

Main Content

The crypto market crash persists as of January 8, as traders and investors await the release of the U.S. non-farm payrolls data, which is likely to impact Federal Reserve policies. Bitcoin's price has dropped from a year-to-date high of $94,500 to $89,344, and Ethereum has dipped below $3,057. This has led to a decrease in the overall market capitalization for all cryptocurrencies, falling by 1.2% in the last 24 hours and totaling over $3.17 trillion.

A significant drop in daily trading volume was noted, decreasing by 17% to $113 billion — the lowest volume recorded this week. Additionally, data shows that futures open interest has fallen by 1% to $139 billion, indicating that investors are reducing their leverage. Liquidations in the market have surged to over $477 million, impacting Bitcoin and Ethereum holders the hardest.

With Friday’s non-farm payrolls report approaching, traders remain cautious. Economists surveyed by Reuters expect the economy to have added more than 55,000 jobs in December. A poll from Polymarket suggested that the unemployment rate in the U.S. may have fallen from 4.6% to 4.5%.

The labor market is a crucial indicator for crypto and stock market traders, significantly affecting Federal Reserve decisions as it's part of their dual mandate. A weak labor report could potentially boost the cryptocurrency market by increasing the likelihood of the Fed implementing interest rate cuts.

This downturn in the crypto market is also coinciding with waning demand for Bitcoin and XRP exchange-traded funds (ETFs). On Wednesday alone, spot Bitcoin ETFs experienced asset losses of over $486 million, following a reduction of $243 million the previous day. These outflows indicate that total inflows for the month have only reached $429 million so far. Additionally, spot Ethereum ETFs saw outflows exceeding $98 million, and XRP funds experienced $40 million in asset losses for the first time since their launch in November.

Bitcoin price chart | Source: crypto.news

On a more optimistic note, the 12-hour Bitcoin price chart reveals the coin has formed a rising wedge pattern, which is typically a bullish continuation signal. The upper limit of this pattern is at $94,516, with a diagonal trendline connecting the lowest points since November. Consequently, the recent price decline may simply be a period of retesting this trendline, suggesting a potential rebound in Bitcoin’s price and possibly a rise in other altcoins in the months ahead.