Crypto market slumps: Here’s what’s driving today’s downturn
BTC upside has remained capped amid heightened macro uncertainty and inflation fears.
- BTC upside has been capped by macro uncertainty amid Trump tariff wars.
- It remains to be seen how the U.S. Jobs report will set the next direction for the market.
President Donald Trump’s tariffs and inflation fears continue to weigh on Bitcoin [BTC].
The world’s largest cryptocurrency’s price has dropped for three consecutive days, reinforcing the pending macro uncertainty over the broader crypto market.
Over the same period, BTC has failed to reclaim $100K. Similarly, ETH has struggled to bounce above $3K as Solana [SOL] toiled below $200. Ripple[XRP] also remained muted and stayed below $2.5 as of press time.
Weak sentiment ahead of U.S. Jobs report
Given President Trump’s tariff impact on inflationary pressure, markets will focus on the U.S. January jobs report (non-farm payroll) for clues on Fed rate plans.
According to the crypto options desk, QCP Capital, there was increased hedging activity with put options (bearish bets) ahead of the report.
This suggested increased downside risk protection and potential bearish sentiment. The firm stated,
“As we head into tonight’s non-farm payroll report, market sentiment remains cautious. The desk continues to observe interest in BTC 28FEB25 80K puts and BTC 21FEB25 90K puts, reflecting persistent caution despite the skew still favoring calls.”
Notably, FXStreet data revealed economists expected January jobs to surge by 170K following a 256K gain in December.
If the actual report misses the January targets, the Fed might be inclined to cut rates further. This would be a positive for BTC and risk-on assets.
However, if the jobs report shows a larger gain than estimated, such a solid labor market would prompt the regulator to hold current interest rates steady for longer. With ongoing inflation fears, this would be bad for BTC and crypto overall.
That said, per the Coinglass liquidation heatmap, key levels to track are $90K, $100K, and $110K. These key liquidity pockets typically act as price magnets, especially during liquidity-driven rallies.
