Bit has officially lost all the momentum it gained at the end of last week, shifting to a strong downward trend amid increasing macroeconomic pressures. Although the announcement of President Trump's establishment of a "Cryptocurrency Reserve Fund" previously helped the market recover in the short term, the core issues of the US economy have not been resolved, making the market outlook increasingly gloomy.
In addition, the plan to raise taxes with a number of key US trade partners is being maintained, while the US Federal Reserve (Fed) has warned of the most severe GDP contraction since the COVID-19 pandemic. If a widespread economic recession occurs, the cryptocurrency market will certainly not be spared from the consequences.
Bit prices have witnessed violent fluctuations in recent days. Last week, the Crypto Fear & Greed Index fell to its lowest level since 2022, signaling that pessimistic sentiment is prevailing.
The emergence of information about President Trump's "Cryptocurrency Reserve Fund" previously helped Bit and many other digital assets recover strongly yesterday. However, the entire upward momentum was quickly wiped out in less than 24 hours. BTC is currently trading at $82,993, down 10% for the day.
Analysts believe that the announcement from Mr. Trump is just a "temporary buoy" in the midst of a major storm, as macroeconomic risks are becoming increasingly severe.
Specifically, last week, Bit ETFs recorded a record net outflow of up to $2.7 billion - the largest figure since the launch of these products. At the same time, the Atlanta Fed branch forecast a 1.5% decline in US GDP. However, the situation is even worse today, as the latest forecast shows that US GDP could plummet by up to 2.8% by the end of Q1 2025 - a real shock compared to the 3.9% growth forecast just four weeks ago.
If this forecast becomes a reality, it will be the most severe GDP contraction in the US since the COVID-19 pandemic in 2020. In this context, it is not surprising that the cryptocurrency market has been experiencing strong sell-offs. Just today, the total value of positions liquidated in the market has exceeded $1 billion.
In addition, President Trump's recent statements about raising taxes on major trading partners such as the EU, Canada, Mexico, and China have also contributed to increasing instability in the market.
Specifically, Mr. Trump has confirmed that there will be no more room for negotiation on imposing taxes on Mexico and Canada, while emphasizing the plan to double import tariffs from China, from the current 10% to 20%. Immediately after this announcement, the digital asset market witnessed a widespread sell-off wave.
In summary, macroeconomic factors are becoming the dominant factors influencing investor sentiment in the cryptocurrency market. Since the approval of Bit ETFs and their deeper integration into the traditional financial ecosystem, crypto has become more sensitive to global economic fluctuations.
However, according to Goldman Sachs CEO David Solomon, the likelihood of the US economy falling into a recession is "very small", despite the instability surrounding global trade policy.
"How Trump implements specific policies is still a factor causing a lot of uncertainty," Mr. Solomon commented to CNBC on March 4.
He also noted that "the Chinese economy is facing significant headwinds."
Earlier the same day, Blackstone CEO Steve Schwarzman said at the same conference that Blackstone's quarterly survey of 250 companies it owns showed the US economy is still stable, and no business leaders predict a recession will occur this year.
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Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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Thạch Sanh
