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Saturday, September 6, 2025
Ethereum Falls, Pulling Crypto Prices Down After Early Gains
On Friday, weak U.S. job data increased chances of a soon Federal Reserve rate cut. This gave crypto markets a short boost, but it did not last long.
On Friday morning in the U.S., crypto markets dropped quickly even though new job data from August pointed to weaker employment growth. Normally, weak job numbers mean the economy is slowing, which increases chances that the Federal Reserve will cut interest rates to support growth. Lower interest rates are usually good news for risky assets like Bitcoin and Ethereum because they make borrowing cheaper and push investors toward higher-return assets.
At first, the August jobs report created hope in the market that the Fed would act faster with rate cuts. Traders believed this could help the crypto market recover. But instead of holding gains, prices turned down quickly. Ethereum led the drop, falling sharply within minutes, while Bitcoin also slipped but at a slower pace. The move showed that even with expectations of easier Fed policy, investors are still cautious and quick to sell during uncertain times.
At first, the news that the U.S. added only 22,000 jobs last month made all markets — crypto, stocks, bonds, and gold — move higher. Investors expected the Federal Reserve to cut interest rates by 25 or even 50 basis points in September.
But after the stock market opened, things quickly changed. Ethereum (ETH) led the fall, dropping nearly 4% in just minutes. Over the past 24 hours, ETH is still down about 1.5% at \$4,279. Solana (SOL) at \$202.95 and XRP at \$2.82 also fell by similar percentages. Bitcoin (BTC) performed a little better, falling about 2.5%. Still, it stayed slightly higher for the past day, trading near \$110,500.
This shows that while weak job growth first lifted hopes for rate cuts, the crypto market could not hold onto gains and turned lower with other markets.
U.S. stocks lost their early gains, with the Nasdaq now down 0.6% and the S\&P 500 down 0.7%. Gold is still attracting investors. After touching a record high of \$3,654 on the jobs news, it slipped slightly but is still up 0.9% for the day.
Heather Long, chief economist at Navy Federal, wrote on X: “There’s been almost no job growth in the last 4 months. The Federal Reserve must cut rates in September, and maybe again in October.”
Traders at the Chicago Mercantile Exchange (CME) also changed their view on the Fed’s next move. Before the jobs report, they were almost certain of a 25-point rate cut. Now, chances are 86% for a 25-point cut and 14% for a bigger 50-point cut.
President Trump also commented on Truth Social, saying Fed Chair Jerome Powell should have cut rates earlier, calling him “too late” once again.
Olu Sonola, Head of U.S. Economic Research at Fitch Ratings, said the warning signs in the job market are getting stronger. He explained that the latest weak jobs report almost guarantees that the Federal Reserve will cut interest rates by 25 basis points later this month. According to him, the Fed will now focus more on protecting jobs and keeping the labor market stable rather than only fighting inflation.
Sonola also pointed out that inflation is moving further away from the Fed’s 2% target, but the bigger concern right now is job growth. He noted that U.S. manufacturing has seen job losses for four months in a row, which is an unusual and troubling trend. In his view, one major reason for this weakness is the uncertainty caused by tariffs and trade tensions. These factors make businesses hesitant to invest or hire, adding more pressure to the economy.
Crypto-related stocks kept falling this week. Coinbase (COIN) dropped 4%, Circle (CRLC) fell 7.5%, Strategy (MSTR) slipped 1.5%, and MARA Holdings (MARA) lost 3.2%.
Companies holding large amounts of Ethereum also declined. Bitmine Immersion (BMNR) went down 5.4%, and Sharplink Gaming (SBET) fell 6%.
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