U.S. stocks and cryptocurrency markets suffered a sharp selloff on Friday, August 2, 2024, following the release of a dismal jobs report from the Bureau of Labor Statistics. The unemployment rate climbed to 4.3%, the highest since the pandemic era, while temporary layoffs hit a three-year peak and private-sector hiring slowed to a 16-month low. The data shattered hopes of a “soft landing” and reignited fears of a full-blown recession.
Major Indices All in the Red; Gold Holds Steady
All five major U.S. stock market indices—the S&P 500, Dow Jones Industrial Average, Nasdaq Composite, NYSE Composite, and Russell 2000—closed lower on Friday. Technology stocks were hit particularly hard. In contrast, safe-haven assets such as gold and silver remained relatively stable, indicating a rotation out of risk assets.
Crypto Market Sheds 5.82% as Bitcoin Breaks Below $62K
The cryptocurrency economy contracted by 5.82% to a total market capitalization of $2.2 trillion. Bitcoin (BTC) dropped to an intraday low of $61,180, down 5.3% in 24 hours. Ethereum (ETH) fell 6.9%, while other leading altcoins suffered even deeper losses: Solana (SOL) declined 8.7%, and Toncoin (TON) dropped 8%. Meme coins were among the worst performers, with Dogwifhat (WIF) plunging 14% and Brett (BRETT) losing 12.6%. The only gainer among major cryptocurrencies was Monero (XMR), which edged up 1% over the past day.
$270 Million in Crypto Liquidations as Leverage Unwinds
The sharp price declines triggered a wave of liquidations in derivatives markets. Data shows that approximately $270.42 million worth of positions were wiped out on Friday, with long positions accounting for $229.54 million of that total. Bitcoin longs saw $83.52 million liquidated, while Ethereum longs contributed $73.73 million. A total of 78,623 traders were liquidated, with the largest single liquidation order being a $3.9 million ETH-USD swap on OKX.
Recession Fears Reshape Risk Asset Outlook
The alarming jobs report has forced markets to recalibrate expectations for Federal Reserve policy. If the U.S. economy is indeed heading into a recession, risk assets—including equities and cryptocurrencies—could face sustained headwinds. However, historical precedents suggest that periods of uncertainty often shake out weak hands and set the stage for future recoveries. Investors will closely watch upcoming payrolls, inflation data, and central bank responses to gauge whether markets can stabilize or drift lower in the months ahead.