Macro perspective: US employment market data below expectations triggers virtual currency market crash
From a macroeconomic perspective, the low performance of the US employment market data has become an important trigger for the virtual currency market crash. The continued strength of the employment market means that wage growth pressure is difficult to be effectively alleviated, which undoubtedly brings greater challenges to inflation governance and makes the "last mile" of achieving inflation targets more difficult. The market originally generally expected that the Federal Reserve would start a rate cut cycle in the first half of 2025, but the reality is far more complicated than expected. At present, the core personal consumption expenditure (PCE) inflation rate in the United States remains at a high level of more than 3%, which is still far from the 2% inflation target set by the Federal Reserve. In addition, the employment market has shown strong resilience, and the Federal Reserve may have to continue to maintain a high interest rate environment for a long time to cope with inflationary pressure.
In this macro context, the chain reaction caused by the adjustment of the virtual currency market is particularly eye-catching. According to statistics, in just 24 hours, the market liquidation scale reached 385 million US dollars, of which long losses reached 212 million US dollars. This data reflects that after the virtual currency market broke through the historical high, excessive speculative positions may have been accumulated. Therefore, any negative news may trigger panic selling among investors, leading to a stampede-like decline in the market and further turbulence. What is more alarming is that on-chain data analysis shows that the current market leverage ratio is close to the level at the peak of the bull market in 2021. This high-leverage environment greatly increases the fragility of the market, making the market more vulnerable to external shocks. Once there is any disturbance in the market, investors may quickly withdraw from the market, triggering a price crash and the spread of a wave of liquidation.