BTC, ETH, and other Altcoins are crashing in price. The latest drop in price is causing fear for a lot of crypto investors in the market about the future of their crypto investment. Many factors contributed to this crash, but the most notable ones are; The U.S. Job report release and the fear of recession. Let’s get into the details of the price crash.

The United States of America Job Data

One of the major reasons for the price crash is the Report about the U.S. job market. The U.S. government releases reports about the number of new jobs created and the ones lost in the country every month. The latest release shows fewer jobs were added to the economy than most people expected. Unemployment rates still stand at 4.2%, a crucial factor that most people were optimistic would reduce.

Although, this might be good news for people in the stock market, as the U.S. government tends to lower interest rates when the job market slows down. They do this to help people and businesses borrow more money easily.

But this time around, it’s a bit different, as both the crypto and stock markets went down after the release. Is there a reason for this? Yes. Although the U.S. government will likely lower interest rates, many people see the Report as a sign of a weak economy—which means recession might start sooner than expected. The fear caused by the latest U.S. job report led to increased sales of cryptocurrencies, leading to the price crash.

Why Does the U.S. Stock Market Matter in Crypto Space?

Cryptocurrency doesn’t belong to a single country, so why is the United States of America’s economy impacting the crypto market? The answer is that many investors trading crypto also buy stocks. When the stock market nose-dives, investors often try to reduce losses by selling their high-risk investments to break even. 

For instance, three of the top U.S. stock indexes closed their trading day in red candlesticks: NASDAQ dipped by 2.55%, the S&P 500 dipped by 1.73%, and the Dow Jones Industrial Average dipped by 1.01%. During economic challenges, investors prefer selling risky assets like cryptocurrency to reduce loss. The latest U.S. job Data Release and the fear of recession it signals have led to the cryptocurrency price crash.

Fear of Recession?

A recession happens when the economy of a country slows down over a long period. This causes the unemployment rate to go up. People have less money to spend, and Businesses sell fewer products due to low demand. 

According to Austan Goolsbee, Chicago Fed President, a recession could happen again. Information coming from prominent figures like this gives more validity to people’s curiosity about the upcoming recession.

When a recession is about to happen, people naturally get scared. Most times, they rush to sell their risky investment, especially crypto as a way of keeping their money safe. 

Bitcoin and Ethereum Drops in Price

BTC and ETH are the two biggest coins in the crypto space. Therefore, whatever happens to their price affects the entire crypto ecosystem. In the last 24 hours, the BTC price dipped to $52,893 which is a 5.7% drop. ETH followed as the price dipped to $2,217, a 7% drop in price. The two coins’ trading volume also went up, signifying active selling pressure in the crypto market.

Trading experts and top investors believe when the BTC moves in price, other cryptocurrencies (Altcoins) usually follow the direction of its movement. Therefore most Altcoins might experience more dip compared to BTC and ETH.

Will Crypto Recover?

Peter Brandt, a well-known crypto expert predicted Bitcoin will drop in price to $46,000 or more. His prediction, among many others, has caused unrest for some crypto inventors. This might also be part of the reasons the crypto market is experiencing this current crash.

Source: Peter Brandt/X

However, most crypto analysts and investors are still optimistic about the future of Bitcoin and other Altcoins. According to Vetle Lunde, a senior analyst at cryptocurrency research company K33 Research “Recession is potentially bullish for Bitcoin in the long term.” He explained that during economic struggles, investors prefer investing in scarce assets like BTC and Gold.

Final Thoughts 

The current crash in the crypto market has put the industry in a tough spot. This is a result of the U.S. job report and the possibility of a recession in the country. Many crypto investors don’t know the next move to make, as Bitcoin, Ethereum, and other Altcoins are currently losing value. However, data has shown that $BTC performs well against inflation and a struggling economy. Many investors are staying on the line, watching and observing what will happen next before making a move.

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