 ▲ Bitcoin and Ethereum plunge / ChatGPT-generated image © |
Soaring oil prices triggered by escalating tensions in the Middle East, combined with a shockingly weak U.S. jobs report, have reignited fears of stagflation across global financial markets. As New York stocks plunged across the board, the cryptocurrency market was also hit hard, with Bitcoin (BTC) surrendering the $69,000 level and investor sentiment freezing.
As of 6:55 a.m. on the 7th, according to CoinMarketCap, the total global cryptocurrency market capitalization fell 3.61% from the previous day to $2.33 trillion. Bitcoin, the market leader, was trading at $68,228.20, down 3.96% over the past 24 hours, barely holding the $68,000 level. Ethereum (ETH) plunged 4.68%, breaking below the key psychological support of $2,000 to trade at $1,979.39. Major altcoins by market cap also posted broad declines, with Solana (SOL) down 4.85%, Cardano (ADA) falling 3.70%, and XRP losing 2.98%. The Fear & Greed Index, a gauge of market sentiment, stood at 20, indicating a state of extreme fear.
The sharp downturn in cryptocurrencies stemmed from a complex macroeconomic crisis that battered Wall Street. On the 6th (local time), the Dow Jones Industrial Average (-0.95%), the S&P 500 (-1.33%), and the Nasdaq Composite (-1.59%) all closed lower for a second consecutive session, intensifying risk-off sentiment.
The biggest shock came from a surge in oil prices caused by disruptions to supply chains. After Iran reportedly struck oil production facilities in neighboring countries and moved to block the Strait of Hormuz, West Texas Intermediate (WTI) crude for April delivery skyrocketed 12.21% to $90.90 per barrel. Its weekly gain reached 35.63%, the largest increase since records began in 1983.
Adding to the turmoil, dismal employment data delivered another blow. The U.S. Department of Labor reported that nonfarm payrolls for February unexpectedly fell by 92,000, defying market expectations of a 59,000 increase and marking a shocking “employment shock.” With prices surging while growth stalls, fears of 1970s-style stagflation are rapidly spreading across Wall Street.
The outlook for the cryptocurrency market remains deeply uncertain. The CBOE Volatility Index (VIX) jumped 24.17% to 29.49, underscoring extreme market anxiety. With oil prices soaring and employment deteriorating, the Federal Reserve’s rate decision calculus has grown increasingly complicated. Strong downward pressure on risk assets appears inevitable for the time being, and investors should take a cautious approach while closely monitoring developments in Middle Eastern geopolitics and macroeconomic indicators.
Disclaimer: This article is for investment reference only, and we are not responsible for any losses incurred based on it. The information provided should be interpreted solely for informational purposes.