Bitcoin Drops 10% As Fed Warns of Covid-Level Recession
Bitcoin turned bearish because the achievements of the weekend were completely gone. Negative momentum has been temporarily stopped due to Trump’s crypto reserve announcement, but macroeconomic problems remain.
Trump’s tariffs on his closest trading partner will still be passed, with the Fed predicting the worst decline in U.S. GDP since the pandemic. A wider recession will also harm the cryptocurrency industry.
Bitcoin fell 10% as recession appears to be close
The price of Bitcoin Already show extreme volatility In the past few days. Last week, Cryptocurrency Fear and Greed Index The lowest level since 2022Bitcoin looks very bearish due to several key factors.
Yesterday, Trump Announced crypto reserves That Causes token price pump. However, today’s momentum has completely disappeared.
There are several reasons why Bitcoin looks so bearish now. Essentially, Trump’s announcement may have only slapped the bandage on very serious wounds.
last week, The worst week ever for Bitcoin ETFwith the Atlanta Federal Reserve forecasting 1.5% of GDP, outflows are $2.7 billion. Today, it becomes even more pessimistic.
The Fed now predicts that U.S. GDP will shrink by 2.8% by the end of 2025. From an economic perspective, this is the end of the world Comparative The forecast four weeks ago showed a 3.9% increase.
Macroeconomic factors don’t seem suitable for encryption
Since the pandemic on the 19th of the joint five years ago, the U.S. economy has not shrunk as much. These macroeconomic factors are an important signal that Bitcoin may turn bearish in the near term. In fact, today’s market liquidation volume has reached nearly US$800 million.
Another important factor that causes Bitcoin volatility is President Trump’s proposed tariffs. Some analysts have already made theories They are not the main reasonthis may be true.
But when Trump recently announced 25% tariffs on the EU, joining Canada, Mexico and China, the cryptocurrency market collapsed.
“Trump: There is no room left on the tariffs in Canada and Mexico. (He) reiterates plans to increase the tariffs in China from 10% to 20%. claim Walter Bloomberg via social media.
In other words, macroeconomic factors are largely market sentiment in the crypto industry. As Bitcoin ETFs are approved, cryptocurrencies have been integrated into traditional finance.
However, if the U.S. economy enters a recession, the disadvantages of this integration will be fully demonstrated.
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