Bitcoin records 5.6% loss as crypto market suffers liquidation amidst U.S. controversial jobs reports
Major cryptocurrencies experienced further downturn on Friday after losing over $700 million as a result of evolving global crisis and a U.S. jobs report that affected the market significantly.
Not long ago, the market experienced a harsh liquidation incident after losing about $1.29billion in a 24-hour time frame, taking many players off guard and closing about 277,000 players’ positions.
The further downward plunge on Friday reveals both the explosive growth and risks inherent in crypto trading, as even large players can be wrong.
High volatility period can provoke a quick dry up of liquidity, hence escalating price movements and fueling liquidations.
Bitcoin, which rose close to $120,000 earlier in the week, fell to $114,000, recording a 5.6% loss. Ethereum performed even more poorly after dropping from $4,000 to $3,500, representing a 10% loss. The carnage saw the liquidation of 160,000 traders.
The market was said to have taken a hit after the release of a disappointing U.S. jobs report, leading to the dismissal of the head of the Bureau of Labour Statistics (BLS), Erika McEntarfer, by President Donald Trump, hours after the agency released the controversial job figures that rattled financial markets.
This was coupled with the United States new tariffs and Trump’s earlier remarks about the deployment of nuclear submarines near Russian waters, triggering investors anxiety and massive selloffs.
Crypto experts have predicted a further crash in Bitcoin to around $80,000 before a potential rebound in the fourth quarter.
The Crypto Fear & Greed Index was reported to have dropped to 55, showing a switch from bullish optimism to cautiousness, as investors now seemed to have concentrated on risk minimization amidst economic uncertainty and rapid increase in volatility.
As maturity increases in the crypto market, events like these are crucial reminders that there is a high potential for both extraordinary gains and losses. The 160,000 traders who faced liquidation yesterday learned the lesson a rather hard way, one would say, even though their experience may have also offered valuable insights to those still in the business.
