Trump's rage over the unexpected non-farm payroll data has led to over $700 million in losses in the crypto market.
By angelilu, Foresight News
On August 1st, global financial markets experienced a period of significant volatility, and the cryptocurrency market was no exception. BTC plummeted to 112,751 USDT in the early hours of the morning, erasing nearly three weeks of gains and hitting a new low since July 10th. As of this writing, the BTC price was 113,639 USDT. ETH also plummeted to a recent low of 3,431 USDT in the early hours of the morning.
According to Coinglass data, the entire network saw $726 million in liquidations over the past 24 hours, including $640 million in long positions and $86.85 million in short positions. Furthermore, ETH saw $270 million in liquidations over the past 24 hours, exceeding BTC's $165 million.
Crypto-related stocks in the US stock market performed poorly. Coinbase plummeted 16.7%, Riot Platforms plummeted 17.75%, and Circle fell 8.4% at the close of trading yesterday, indicating that investors' risk appetite for crypto assets is declining.
Weak U.S. jobs data, Trump's fierce political response and rising geopolitical risks have jointly triggered significant market volatility.
Macroeconomic environment: Collapse of US employment data caused market shock
On the evening of August 1st (Beijing time), the U.S. Bureau of Labor Statistics released its July nonfarm payroll report, showing a mere 73,000 increase in nonfarm payrolls in July, significantly below the expected 104,000 and marking the smallest gain since October of the previous year. Even more shocking to the market, the Bureau of Labor Statistics also significantly revised down its previous data, reducing employment figures for the previous two months by a combined 258,000 jobs.
Trump responds strongly: Fire the Director of the Bureau of Labor Statistics immediately
US President Trump reacted strongly to the weak jobs data. He posted on social media accusing Erika McEntarfer, Biden's appointee to head the Bureau of Labor Statistics, of fabricating employment data before the election, saying, "The non-farm payroll data was manipulated to embarrass me." Hours after the release of the non-farm payroll report, he ordered the immediate dismissal of McEntarfer. William Wiatrowski will take over as acting director of the Bureau of Labor Statistics.
Trump said: "We need accurate employment data. This kind of important data must be fair and accurate and cannot be manipulated for political purposes." He also criticized the Federal Reserve for "playing tricks" and cutting interest rates twice before the presidential election, and hinted that Powell should also "retire."
In addition, Federal Reserve Board Governor Kugler announced that he would resign early next week, which provides Trump with an opportunity to appoint his preferred candidate in advance, which may have a significant impact on the Fed's future monetary policy.
Rising geopolitical risks
In addition to economic data, geopolitical risks are also heating up. Trump announced on social media that he has ordered the deployment of two nuclear submarines to the vicinity of Russia based on the "provocative remarks" of former Russian President Dmitry Medvedev.
This series of events directly triggered a sharp drop in all three major US stock indices. On August 1st, Eastern Time, the US stock market lost over $1 trillion in market value in a single day. Simultaneously, risk aversion intensified, sending gold prices soaring, breaking through $3,350 per ounce and reaching $3,362 per ounce as of this writing.
BTC enters a "devil month of decline" in August
The crypto market has historically performed poorly in August. According to Lookonchain, August and September are historically the worst performing months for Bitcoin (BTC). Data shows that in the past 12 years, Bitcoin prices have fallen in August and September in eight of those months, with a 67% probability of decline.
The market is facing a key turning point: a short-term correction or a long-term consolidation?
At present, the market faces a key question: Is this pullback a healthy short-term correction, or is it about to enter a long-term consolidation and volatility again?
Following this data event, market expectations for a September Fed rate cut have continued to rise. CME FedWatch data shows that the probability of a 25 basis point rate cut in September has risen to 89.8%, while the probability of maintaining interest rates has fallen to 10.2%. The probability of a cumulative 50 basis point rate cut in October has reached 51.8%. From a macro perspective, weak US jobs data could accelerate the Fed's pace of rate cuts, which theoretically should be positive for risky assets, including cryptocurrencies.
ARK Invest increased its holdings against the trend
It is worth noting that against the backdrop of increasing downward pressure on the market, investment institution ARK Invest increased its holdings against the trend on August 1. Several funds under ARK simultaneously increased their holdings of Coinbase (COIN) shares. ARKK, ARKW and ARKF funds bought a total of 94,678 shares of Coinbase, with a total value of approximately US$33 million. In addition, Ark Invest bought approximately US$18.7 million worth of BMNR shares (a listed company that uses ETH as its financial strategy).
Whale Game: Liquidation vs. Dip Picking
Whales are selling quickly while others are buying at the bottom. Arthur Hayes sold 2,373 ETH (worth approximately $8.32 million), 7.76 million ENA (worth approximately $4.62 million), and 38.86 billion PEPE (worth approximately $414,700) in the past six hours. Meanwhile, according to @ai_9684xtpa, an address suspected to belong to Anchorage Digital appears to be buying 14,933 ETH, worth approximately $52.07 million, through the Galaxy Digital OTC platform. This address received these tokens four hours ago (almost the starting point of ETH's rebound) at an average price of $3,487.
Traders' perspective: Technical analysis opinions are divided
Investment firm DragonFly has identified key accumulation and liquidation areas for Bitcoin, suggesting the market may first test upward liquidity before exploring downward liquidity zones. Notably, Bitcoin's formation of a flag technical pattern suggests a potential upward move without reaching the bottom liquidity level. While the current trend remains uncertain, analysts emphasize that closely monitoring the BTC liquidity distribution chart is crucial for understanding future market trends.
Bitcoin trader Crypto Bully pointed out that BTC finally broke through the low of the range and fell below the moving weighted average price band (VWAP bands). He said he would maintain a short-term trading pattern while the Bitcoin price rebounds to $115,000 or falls to $110,000, and try to seize short-term long opportunities before the Asian trading session.
Another analyst, Crypto Fella, expressed a more cautious view: "Bitcoin's fall below the support level of $114,700 may further test the support area of around $112,000 on the 4-hour chart."
Data analyst and quantitative trader Crypto Painter said that BTC's descending wedge has been broken, and before the price returns to the wedge, it can only be treated as a descending channel.
Crypto investor Sensei, however, remains optimistic, predicting the bear trap is over and the market can prepare for a rally. Foresight News notes that a bear trap is a key phase in market psychology cycles, referring to a brief market decline followed by a rapid upward reversal, leaving short sellers (or bears) with losses.
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