Why is the crypto market down today?
The cryptocurrency market took a hit today, with the total market capitalization dropping by over 2.5% to about $3.15 trillion on Feb. 7.
While the crypto market is known for its volatility, several concrete factors have contributed to this latest dip, including:
Liquidations across the crypto market pulling down crypto prices.
Investors are in risk-off mode ahead of US jobs data for January.
Weakening market technicals hint at further downside.
Ethereum leads market slump
Today’s crypto market decline is part of a correction that started on Jan. 31 when US President Donald Trump issued an executive order imposing tariffs on imports from Mexico, Canada and China.
The downtrend week continues, including:
Ether
ETHUSD leads the market in losses, down 5% over the last 24 hours to trade just below $2,700.Bitcoin
BTCUSD posted moderate losses, down 1.3% to areas around $96,800.Other top-cap cryptocurrencies such as Solana
SOLUSD, Dogecoin 
DOGEUSD, and Cardano (ADA) are also down 6.3%, 6.5% and 6%, respectively.
Liquidations in the crypto market have also contributed to the drop, notably:
The sell-off has triggered a cascade of leveraged position closures, with over $250 million in crypto liquidations recorded over the last 24 hours.
Long ETH leveraged positions totaling $32.75 million were also liquidated on the day.
This is slightly higher than the $32.2 million in BTC long liquidations.
Over 124,900 traders were liquidated in the past day, with the largest single liquidations taking place on Binance involving an
ETHUSDT trade worth $2.59 million.
A predominance of long liquidations suggests that the crypto market was overleveraged on the bullish side.
Investors enter risk-off mode ahead of US jobs data
Adding to the market’s volatility is the looming release of US jobs data on Friday, Feb. 7. Investors and traders are on edge, waiting for labor market indicators like job openings, unemployment rates, and wage growth, which could influence the Federal Reserve’s stance on interest rates.
Market analysts forecast a slowdown in job openings to 170,000 from December’s 256,000.
The unemployment rate is expected to remain flat at 4.1%.
Average hourly earnings are anticipated to increase by 0.3% month-on-month, similar to December’s pace.
“There’s a 28% chance that over 300,000 jobs were added in January,” said capital markets commentator The Kobeissi Letter in a Feb. 6 post on X.
According to The Kobeissi Letter, this is “significantly” above Wall Street’s median expectation of 170,000 jobs added.
Note that:
Weaker-than-expected jobs numbers could lead to a more dovish Fed policy.
Traders could then price in the possibility of faster rate cuts, spurring demand for riskier assets like stocks and Bitcoin.
The odds of the Fed keeping interest rates unchanged at the March 19 FOMC meetings are now at 85.5%.
The earliest possible rate cut is expected in June, with the odds at 44.8%.
Will the crypto market invalidate the bull flag?
From a technical standpoint, the TOTAL index, or the combined market capitalization of all cryptocurrencies, is currently testing the support level at $3.11 trillion, the bull flag’s lower boundary.
Key points to note:
TOTAL briefly broke down below the lower boundary of a bull flag.
If this support line finally cracks, a retest of the 50-day simple moving average (SMA) at $2.55 trillion will be on the cards.
Losing this support would see TOTAL return to the start of the flag pole at $2.25 trillion, down about 27% from the current price levels.
The sharp drop in the daily relative strength index from its overbought area of 78 in December to the current value of 48 suggests the bears have a slight advantage.
According to popular analyst Crypto Zone, ”the crypto market is currently in a state of caution,” with the Fear and Greed Index “firmly in the fear zone” at 35.
The analyst added:
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.