Source: Coinglass

The crypto market as a whole has been bleeding red, with other major assets like Ethereum also experiencing substantial losses. Ethereum (ETH) plummeted over 18% from $2,695 to as low as $2,171 before recovering slightly to $2,234.

Several factors have contributed to this market downturn:

1. U.S. Economic Concerns

The recent weak U.S. jobs report has sent shockwaves through global markets, including the cryptocurrency sector. The report showed a significant jump in the unemployment rate, with nonfarm jobs falling well short of expectations.

This data has sparked fears that the U.S. economy might be heading towards a recession, a prospect that has spooked investors across various asset classes.

The potential for an economic downturn in the world's largest economy has far-reaching implications. It could lead to reduced consumer spending, decreased corporate profits, and a general slowdown in economic activity.

For the crypto market, which often thrives on optimism and growth prospects, this negative economic outlook has prompted many investors to reduce their exposure to high-risk assets like Bitcoin and other cryptocurrencies.

Moreover, the jobs report has fueled speculation about future Federal Reserve policies. While some believe that a weakening economy might prompt the Fed to cut interest rates, potentially benefiting fixed-supply assets like Bitcoin in the long term, the immediate market reaction has been one of risk aversion.

2. Japanese Economic Shift and the Yen Carry Trade Unwind

The recent decision by the Bank of Japan to raise interest rates by 0.25% has had a big impact on global markets, particularly affecting the popular yen carry trade strategy.

This move, which marks a shift away from Japan's long-standing ultra-low interest rate policy, has led to a sharp appreciation of the yen, rising nearly 10% against the USD in just three weeks.

The yen carry trade, a strategy where investors borrow yen at low interest rates to invest in higher-yielding assets, has been a significant source of liquidity for global markets, including cryptocu