The market values of Bitcoin alongside other risk assets have plummeted substantially due to intensifying worries about a US economic downturn. Investor opinion has deteriorated which caused major stock and cryptocurrency value decreases. Expert analysts project additional market transformations because of ongoing macroeconomic uncertainties inflationary pressures and Federal Reserve policy adaptations.
Bitcoin & Stocks Plunge as Risk Appetite Declines
Market conditions continue to pressure investors so their confidence levels have decreased. During this period both the S&P 500 and the Nasdaq experienced substantial market losses where the Nasdaq dropped by almost 3.8%. The “Magnificent 7” tech stock group experienced an overall $830 billion reduction in market capitalization while the market remained under downward pressure.
The financial crisis led Bitcoin to experience a decline despite its popular status as economic stability protection. The crypto market saw a 1% decrease in Bitcoin value reaching $80,579 while its daily minimum reached $76,624. The market uncertainties drove investors to increase their trading activities which resulted in trading volume rising by 33% to $58.7 billion. According to market analysts, Bitcoin may plummet to $70,000 because market warnings show signs of increasing caution.
The analysts at QCP Group determine that post-election confidence has weakened enough for put option trading volumes to reach their peak since 2020. Some elements exist that might offer assistance. atótares in 10-year Treasury yields and a weakening US dollar tend to enhance both Bitcoin value alongside stock price performance. Economic instabilities continue to make traders adopt a protective stance.
Bitcoin Slips as Trump’s Tariff Policies Raise Economic Concerns
Business analysis company Yahoo Finance reported that Goldman Sachs changed its 2025 US GDP forecast from 2.4% to 1.7%. According to the firm, the main issue it faced under former President Donald Trump involved trade policies. The Federal Reserve’s preferred inflation measurement indicated that the target of 3% will be achieved during the year’s final period.
The Goldman Sachs economist Jan Hatzius identified three main threats including higher consumer cost increases coupled with tighter credit conditions and postponed corporate spending. Market pressure will increase simultaneously with economic growth being hindered by these three factors. Morgan Stanley revised their economic growth projection to 1.5% for 2025 while using the same growth factors. The investment bank modified its core PCE inflation prediction to 2.7% while raising the previous level of 2.5%.
Inflation may trigger the Federal Reserve to extend its interest rate policy beyond previous expectations. The present situation would generate adverse effects on investment risk categories including Bitcoin and equities. The market’s attention shifts to future US CPI inflation data because it will clarify current economic conditions.
Growing Recession Fears To Shake Market Confidence
The fear of recession in the United States market continues to grow. The former PIMCO CEO Mohamed El-Erian upgraded his forecast of economic contraction from 10% to 25-30%. The betting market observed on Polymarket predicts a 38% likelihood for the US to officially announce a recession during this year.
The stress over Trump’s fiscal decisions and the Federal Reserve’s upcoming choices resulted in market stability diminishing. Current economic risks might delay upcoming Federal Reserve rate cuts which a few analysts had predicted for 2024. The downward pressure on Bitcoin together with other financial assets will persist due to this situation.
Every market participant closely tracks future economic reports as a result of heightened market uncertainty. Future weeks will shape Bitcoin and stock recovery potential because they will indicate whether a drawn-out bear market lies ahead.
