Cryptocurrency markets saw a broad decline over the weekend, as investors braced for upcoming U.S. employment data and reacted to Treasury Secretary Scott Bessent’s remarks about the potential economic fallout from persistently high interest rates.
Bitcoin, the largest cryptocurrency by market capitalization, dipped to around $108,000, registering a 1.7% drop over the previous 24 hours. Ethereum also slid sharply, falling approximately 3.5% to hover near $3,750, according to market data. The downward trend extended across the broader crypto market, with altcoins suffering more pronounced losses as traders shifted to a more cautious, risk-averse approach.
This pullback comes as the market prepares for key labor statistics from the United States, which are anticipated to influence the Federal Reserve’s monetary policy outlook. Investors are particularly focused on whether the data will support the case for interest rate cuts, which could provide relief to risk assets like cryptocurrencies.
Comments from Treasury Secretary Scott Bessent added to the cautious mood. In a televised interview, Bessent warned that the Federal Reserve’s prolonged tight monetary policy might have already pushed several sectors of the U.S. economy, notably housing, into a recession-like state. He argued that the central bank now has space to begin easing rates, hinting that the current level of borrowing costs may be unsustainable.
“The economy is showing signs of stress under the weight of elevated interest rates,” Bessent said, noting that access to credit is tightening and financial conditions are becoming more restrictive for both consumers and businesses.
The crypto market, which often reacts sensitively to macroeconomic developments and central bank policy, interpreted this as a signal of potential market volatility in the short term. Historically, digital assets like Bitcoin and Ethereum have tended to perform better in environments of lower interest rates, which make speculative investments more appealing.
Altcoins were particularly hard hit, with tokens like Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) experiencing steeper declines compared to Bitcoin. This divergence suggests that investors are retreating to more established assets or cash amid uncertainty, reducing exposure to higher-risk coins.
Market liquidity also remained low throughout the weekend, compounding the price swings. Weekend trading is typically subdued, with fewer active participants and thinner order books, making the market more susceptible to sharp moves on limited volume.
Meanwhile, stablecoins such as USDC and USDT maintained their typical dollar pegs, reflecting their role as safe havens during turbulent periods. However, even these assets saw slight fluctuations as traders moved funds across wallets and exchanges in anticipation of market shifts.
Looking ahead, all eyes are now on the upcoming U.S. non-farm payrolls report. A strong jobs number could bolster the Fed’s stance to keep rates elevated longer, potentially exerting further downward pressure on crypto prices. Conversely, weaker employment data might strengthen the argument for rate cuts, offering potential upside for digital assets.
Institutional investors are also closely watching the bond market, where yields have remained elevated amid the Fed’s hawkish tone. The 10-year Treasury yield continues to hover near multi-year highs, signaling persistent inflation concerns and a cautious outlook for risk assets.
Crypto derivatives markets are also flashing warning signs. Open interest in Bitcoin and Ethereum futures has declined over the past week, suggesting that traders are pulling back from leveraged positions. Funding rates have turned neutral or slightly negative, indicating a lack of bullish conviction among speculators.
In addition, on-chain data shows a rise in stablecoin inflows to centralized exchanges, which could suggest that investors are preparing to buy the dip—or, alternatively, are moving assets to safer positions amid uncertainty.
Technical analysts point out that Bitcoin has fallen below key support near $110,000, and further downside could test the $105,000 level. Ethereum, which had been showing strength earlier in the month, now faces resistance around $3,800 and could see further retracement if sentiment doesn’t improve.
Despite the short-term weakness, some market participants remain optimistic. They argue that if the Fed signals a dovish pivot in the coming weeks, it could ignite a new wave of bullish momentum for crypto. Moreover, the upcoming Bitcoin halving event, which historically precedes price rallies, is also on the radar of long-term investors.
Still, caution dominates the market narrative for now. With macroeconomic uncertainty, tightening financial conditions, and geopolitical tensions adding to investor anxiety, the crypto space may remain under pressure until clearer signals emerge from the Federal Reserve and economic indicators.
In summary, crypto prices have retreated amid a confluence of macroeconomic concerns, cautious investor sentiment, and low weekend trading volume. The market’s next move will likely hinge on the results of the U.S. jobs report and the Fed’s subsequent response—developments that could either affirm the current downtrend or provide a catalyst for recovery.