This week, the cryptocurrency market experienced a sharp decline driven by a combination of weak economic data, renewed trade tensions, and widespread profit-taking.
Weak Employment Data
The cryptocurrency market fell after the release of weak employment data in the U.S. The report indicated that the economy created only 73,000 jobs in July, while the unemployment rate rose to 4.2%.
Additionally, the agency revised down job additions for the prior two months by 260,000, indicating that employment growth over the last three months averaged just 35,000, the worst level since the pandemic.
Trade War Intensifies Situation
The situation in the cryptocurrency market also worsened due to concerns over Trump’s trade war. He imposed tariffs on key trading partners including India, South Africa, and Switzerland.
While the U.S. reached agreements with partners such as Japan, the European Union, and South Korea, the base tariff rate remained at 15%. These tariffs could contribute to slowing U.S. economic growth, as evidenced by this week's employment data.
Market Pressure from Profit-Taking
Furthermore, the cryptocurrency market is continuing to crash amid profit-taking and forced liquidations among market participants.
It is common for traders and investors to take profits after strong surges in the stock or crypto market, which explains why Bitcoin and altcoins often pull back after significant gains.
Thus, the cryptocurrency market is facing multiple pressure factors, including economic data and government actions. This creates unfavorable conditions for further market growth.
