Summary
- Bitcoin fell to $110,000 while Ethereum dipped to $4,400 amid risk-off sentiment.
- Liquidations surged to $228 million as traders reposition ahead of US payroll data.
The digital economy registered widespread losses on September 4, with significant digital assets falling as traders were careful before the US non-farm payrolls (NFP) report is released later this week.
Bitcoin and Ethereum retreat as rate expectations shift
Bitcoin fell 2.32 percent to trade around 110,000, and Ethereum fell 3.54 percent to 4,400. As per Market Cap data, the total market valuation of all digital assets contracted sharply by about 70 basis points to reach 3.82 trillion. This is the third day that the primary tokens and altcoins are in the red.
The sell-off comes amid increasing uncertainty about the direction of monetary policy in the United States. Investors are monitoring macroeconomic indicators, especially labor market statistics, keenly to understand the Federal Reserve’s next move. A weak NFP print will likely be a shock that will lead to an interest rate cut in the latter part of the year.
Recent labor market statistics have already predetermined a conservative mood. The US Labor Department released statistics showing that job openings decreased drastically in July, and the ADP private payrolls report indicated that August added only 54,000 jobs, compared to 106,000 in July and less than the industry anticipated of 65,000. The market has come to expect that the NFP report on Friday will record that 75,000 jobs were created in August, a slight improvement on July, which recorded 73,000.
The poor report may cement the anticipation of a 25-basis-point Fed rate reduction, which has a proven record of favoring risk assets such as cryptocurrencies. Until such data is proven, though, traders are de-risking.
Liquidations surge and sentiment indicators flash caution
Liquidation pressures were added to the downside volatility. CoinGlass data show that crypto liquidations have increased by 10 percent in the last 24 hours, to 228 million. This higher forced-selling increases the negative-moving trend and shows greater liquidation of leverage in the derivative marketplaces.
In the meantime, the Crypto Fear and Greed Index, a composite index of sentiment that uses price momentum, volatility, and market volume, fell to a neutral level of 44. In the past, neutral readings were attributed to indecisiveness, which usually leads to breakouts or additional downside pressure.
Simultaneously, the Altcoin Season Index stood at 52 without a dominant rotation into smaller tokens. There was also a general market weakness in top altcoins like BNB, XRP, and Solana.
As ETF applications in the cases of Solana, XRP, and Hedera Hashgraph are still pending, and the Fed’s direction is still based on data, volatility is expected to be high in the short term. Traders will observe Friday’s NFP report when confirming the possible policy pivot.
