- Global markets fell sharply after a poor US jobs report, with US futures and cryptocurrencies seeing significant declines.
- Japan’s Nikkei 225 dropped 6%, while Bitcoin plunged 10% and Ethereum 21% amid rising recession fears.
- The Bank of Japan’s rate hike to 0.25% increased the cost of leveraged investments, worsening market instability.
The global markets have plunged following poor US jobs data and rising geopolitical tensions. The US jobs report showed fewer job gains than projected, heightening concerns about a likely economic slowdown and causing a widespread sell-off in various financial markets.
Cryptocurrency Market Under Pressure
The crypto market has been extremely volatile. Bitcoin fell 10% from $58,350 to $52,500 in less than two hours. This is the first time Bitcoin has dipped below $53,000 since February. The collapse caused more than $740 million in leveraged positions to be liquidated across the cryptocurrency market. Many traders lost more than $256 million in Ether (ETH) longs, making them the worst hit.
The recent increase in cryptocurrency prices drew a large number of new investors looking to make additional profits. However, as the market turned, these additional holdings were liquidated, accelerating the current decline.
The recent drop in Bitcoin’s price, with lower highs and lower lows, undermines the bullish patterns that came before it. With Bitcoin trading below the 200-day moving average, additional falls are possible, and altcoins are likely to see far greater changes.
Asian markets and yen impact
Japan’s Nikkei 225 index fell around 6%, showing investor concern about the economy. The Bank of Japan’s move to raise interest rates from 0% to 0.25%, the first increase in years, has raised the cost of maintaining leveraged investments supported by cheap yen.
US Futures and Recession Fears
The jobs report had a negative impact on US stock futures. Dow futures declined 0.5%, S&P 500 futures down 1.2%, and NASDAQ futures dropped 2.1%. Furthermore, recession fears are increasing, with the Sahm Rule Recession Indicator surpassing the 0.50 barrier, which has historically signaled the start of a recession in the US economy.
The combination of a bad US jobs report, geopolitical tensions, and economic recession fears has resulted in large hits in both the stock and cryptocurrency markets. Investors are navigating an uncertain landscape filled with uncertainty and volatility.
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