Trump's "data fraud" roars, the crypto market suffers a brutal washout.

Recently, Trump was extremely angry at a campaign rally in North Carolina, directly shouting "data fabrication," pointing at the air, and very agitated. The U.S. Department of Labor announced a revision of non-farm payroll data downward by 818,000, which is equivalent to wiping out 30% of the new jobs added over the past year. Trump immediately jumped out to accuse the Biden administration of manipulating the data, saying this is an economic scam.

Non-farm data ignites the flames of political and economic warfare.
The recent downward revision of non-farm payroll data is not simple; it is the largest adjustment since 2009, with 818,000 jobs gone, an average loss of 16,000 jobs per state. The White House remains stubborn, claiming the revision does not affect overall employment growth, but the Trump team will not let this opportunity pass, immediately countering: "If employment data can be fabricated, then can we trust inflation, GDP, and other data?"

Why is Trump so anxious? It turns out that the 2024 election is approaching, and polls show that Trump is leading Harris by 6 percentage points on economic issues. Voters in swing states like Pennsylvania and North Carolina consider employment data an important reference for their votes. As soon as the non-farm data was released, Trump’s campaign team immediately flooded Twitter, saying that Biden's economic miracle is just magic in an Excel spreadsheet.

The crypto market has been caught in a storm.
The political battle not only caused a plunge in the U.S. stock market during the late trading session, but also brought disaster to the crypto market. In the early hours of August 2, Bitcoin (BTC) slid down like on a slide, plummeting from a high of $116,000, with a large bearish candlestick appearing on the 1-hour chart, resembling a "guillotine" as the support level of $113,000 was instantly breached. Technical analysts exclaimed that the resistance level of $198,000 on July 28 had not been broken, and the bulls should have been alert much earlier.

More critically, market sentiment has been severely impacted. Trump stated that the data is fabricated, which has shaken everyone's expectations of a Federal Reserve rate cut. Institutional investors are wondering: "If the employment data is fake, would the Federal Reserve dare to easily cut rates?" As a result, they are fleeing the market. Moreover, the U.S. government plans to sell 69,370 bitcoins seized from the Silk Road, and this news is like a bomb, adding insult to injury for the market.

The power game of the crypto market
Behind the "data war", Trump is actually playing a power game in the crypto market. On one hand, he publicly supports Bitcoin and promises not to sell a single coin after taking office; on the other hand, his team is hyping the reform of the "Department of Government Efficiency (DOGE)", claiming to liquidate the "false data" of the Biden era. This contradictory stance makes the market feel like it's walking on a tightrope.

Bulls believe that if Trump is elected, it could drive Bitcoin to become a strategic reserve, leading to a continuous influx of institutional funds. However, bears are not to be underestimated; they think that if data falsification is confirmed, the Federal Reserve may delay interest rate cuts, causing the dollar index to rebound, which would be disastrous for safe-haven assets like gold and Bitcoin.

Future Trends of the Crypto Market
As of the early morning of August 2, BTC was fluctuating around $113,000, but the technical indicators have already shown a "death cross," with the 5-day moving average crossing below the 20-day moving average, and the MACD green bars are also expanding. Analysts warn that if it falls below the $110,000 mark, the next target could be $105,000. Trump's next move has become a key variable.

If he continues to bombard with accusations of data fraud, the market may feel that the policy uncertainty is too great, making it difficult for BTC to rebound in the short term. If he shifts towards economic commitments, such as announcing a "Bitcoin Reserve Program", it could trigger a new round of explosive growth. An institutional trader sneered and said, "This is the charm of the crypto market, always racing through the cracks of politics, economy, and human nature. The question now is not how low it can drop, but whether you dare to pick up the bloody chips in the pool of blood."

Personal opinion
In my opinion, Trump is using the non-farm payroll data as a political weapon, which is essentially a political game, with the crypto market becoming the victim of this game, being "precisely harvested". Whether the data is true or not is no longer important; what matters is that market confidence has collapsed. When political lies infiltrate economic indicators, Bitcoin, the so-called "digital gold", has its safe-haven attributes suppressed by the dollar index.

Take this incident as an example, instead of betting on what Trump will say, retail investors should closely watch the Federal Reserve's movements. If the Federal Reserve delays interest rate cuts, then $105,000 could be the true abyss for Bitcoin; if Trump really dares to include Bitcoin in the government's reserves, that would be a signal for a bull trap.
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