Investors On Edge as Payrolls Shock Sparks Crypto Turmoil

Traders and investors are closely watching the potential impact of U.S. Producer Price Index (PPI) data on the cryptocurrency market, especially as broader economic indicators continue to signal a cooling labor market and rising expectations for a Federal Reserve rate cut. Recent revisions to U.S. payrolls data have heightened uncertainty in both traditional and digital asset markets, with Bitcoin and Ethereum experiencing price declines amid shifting macroeconomic expectations.

The U.S. Labor Department’s recent adjustment to payroll figures for the year ending March 2025 revealed a net reduction of 911,000 jobs—the largest annual revision in history, surpassing even the levels recorded during the 2009 financial crisis. This downward revision has led to a reassessment of the strength of the labor market, with significant job losses concentrated in consumer-facing sectors such as leisure, hospitality, trade, transportation, and utilities. The data suggests a weakening in private-sector hiring, with the scale of the revisions exceeding those seen outside the Great Depression and 2020 pandemic shock.

As a result, the crypto market has seen increased volatility. Bitcoin fell below $113,000 to trade in the $111,000 range, while Ethereum also declined, pushing the total market cap below $3.9 trillion. According to Coinglass data, over 169,000 traders were liquidated in the 24 hours following the data release, with more than $342 million in total liquidations. Notably, 81% of these liquidations were attributed to long positions, indicating that traders had been positioning for a market rebound that did not materialize.

Despite the broader market selloff, some altcoins showed resilience. Solana and Dogecoin remained marginally up, while Ethena surged 8% in the last 24 hours and 21% over the past seven days. Hyperliquida also posted a 6% increase, continuing its bullish trend. These divergences suggest that some investors are selectively taking advantage of market corrections, while others remain cautious about the macroeconomic outlook.

The latest payrolls data has also intensified bets on a Federal Reserve rate cut. The Kobeissi Letter noted that the U.S. economy has lost over 142,000 jobs in the past four months outside of the healthcare sector, and the scale of the revisions is now greater than the largest adjustment seen during the 2009 financial crisis. If the Fed moves to cut rates, it could mark the first such action in over 30 years while inflation remains above 2.9%, further complicating the economic landscape.

Investors are now turning their attention to the upcoming PPI data, which will provide more insight into the underlying inflationary pressures. If the PPI shows moderation, it could reinforce expectations for a Fed rate cut and potentially stabilize or even reinvigorate the crypto market. However, until more data is available, market participants remain on edge, with trading volumes and volatility reflecting heightened uncertainty.