Following stronger-than-expected U.S. employment data for May, markets quickly scaled back expectations for Fed rate cuts, putting broad pressure on risk assets. The crypto market followed suit, with Bitcoin dropping as low as $60,951—the lowest level in nearly four months—while Ethereum, XRP, and Solana also saw significant declines.
Employment data dampens expectations for rate cuts
The report noted that the U.S. added 172,000 jobs in May, significantly exceeding market expectations. Following the data release, investors reassessed the interest rate outlook, concluding that the Federal Reserve is more likely to maintain high rates in the near term.
Under this backdrop, crypto assets declined in tandem with U.S. equities. The article noted that the crypto market exhibits high correlation with the S&P 500 Index, and shifts in macroeconomic expectations directly amplified selling pressure.
Leverage liquidation amplifies downward price movements
After the price decline, leveraged positions began to be liquidated en masse. Over the past 24 hours, liquidations on Bitcoin-related positions alone exceeded $267 million, with total long liquidations across the market surpassing $1 billion.
Such declines often trigger a chain reaction: once the price falls below key levels, automated stop-loss orders and forced liquidation sell orders continue to flood the market, further pushing the price down and triggering more liquidations, thereby amplifying the decline.
- Bitcoin fell approximately 4.74% in a single day.
- Ethereum fell approximately 9.18% to $1,609.
- XRP fell approximately 5.22%, and Solana fell approximately 6.20%.
Zcash vulnerability intensifies market concerns
In addition to macroeconomic and leverage factors, security concerns surrounding Zcash have increased market pressure. Reports revealed that developers disclosed a critical vulnerability in its shielded transaction pool, causing Zcash to drop more than 40% following the announcement.
Since privacy features are a core characteristic of Zcash, this incident has sparked market concerns about the security of privacy-focused protocols, with the resulting sentiment subsequently spilling over into the broader cryptocurrency sector.
The market is focused on the June Fed meeting.
As of the report's publication, the total cryptocurrency market capitalization dropped to approximately $2.11 trillion, down 4.81% on the day. The Fear & Greed Index fell to 16, entering the "extreme fear" range.
The report suggests that the current market is testing the $2.1 trillion support level. Next, the Federal Reserve's interest rate meeting on June 16–17 will be the next key moment for the market to observe changes in interest rate expectations.