Bitcoin and Stock Markets Face Turmoil as Disappointing US Employment Report Impacts Sentiment

Over the past week, stock and cryptocurrency markets have faced a series of turmoil, with Bitcoin and major indices suffering significant drops.

Stock and cryptocurrency markets faced another round of turbulence this past week, as major indices and Bitcoin suffered notable drops.

On Friday, an initial attempt at Bitcoin recovery proved insufficient, leading to a 6% reduction in its value over the following hours, a movement that coincided with drops observed in the main North American market indices.

The scenario was prompted by a lackluster US employment report released the previous week, which negatively impacted bond yields and the value of the dollar, a situation that would typically benefit riskier investments such as stocks and Bitcoin, although this time the expected effect failed to materialize.

While the Nasdaq registered a 3.1% drop and the S&P 500 fell 2.6%, Amazon and Nvidia shares also experienced sharp declines, contributing to a 54% increase in the Volatility Index (VIX).

This intense selling phase was not limited to the United States. In Japan, the Nikkei index suffered a significant drop of 5.8% on Friday, after already falling more than 4% the day before, in response to subtle adjustments in the Bank of Japan's monetary policy.

Bitcoin and cryptos in free fall today

Despite a brief advance that took Bitcoin past the $65,000 mark, BTC failed to sustain the gains and retreated to $61,300, reflecting a drop of almost 6% in the last 24 hours.

Meanwhile, most major altcoins are gaining negative momentum. ETH started a major decline and trades below the $3,000 support. XRP is moving lower towards the $0.535 support. ADA may revisit the $0.32 support zone. Solana is falling towards the $145 support.

Bitcoin needed to stay above $63,300

AlphaBTC’s Bitcoin analysis

In the meantime, AlphaBTC’s Bitcoin analyst commented on the recent volatility, maintaining an optimistic view: “We got the #Bitcoin sweep I was hoping for and a nice recovery from the range.” He was referring to Bitcoin's price movement since July 30, which saw the cryptocurrency retreat from highs of $66,996 to reach a low near $63,000 on August 2. According to AlphaBTC, Bitcoin needed to hold crucial support at $63,300 to have a chance of retesting higher peaks at $67,000.

We got the # Bitcoin sweep I was waiting for and a nice reclaim of the range. $BTC now has to hold the range low at 63.3k and we wait to see how it reacts on the 67k test.

Losing 63k now would be really bad! https://t.co/3eY88FKNrw pic.twitter.com/mPGEkzVH7a

— AlphaBTC (@mark_cullen) August 2