Americas Crypto Market Outlook: Recession Fears Dampen Bitcoin Recovery Hopes

By Omkar Godbole (All times ET unless stated otherwise) Bitcoin, currently at $86,817.46, has stabilized around its 200-day average of approximately $84,000, following a dip below $77,000 earlier in the week. The broader market rebound was driven by memecoins, layer-2 tokens, and gaming tokens. However, sustaining a prolonged uptrend may still prove challenging, particularly given the Trump administration's apparent tolerance for market instability. Just two months into Trump's presidency, the crypto market was optimistic that any turbulence caused by tariffs would prompt swift policy support from the White House. This optimism appears to have been misguided. Over the weekend, Treasury Secretary Scott Bessent stated that corrections are a normal and healthy part of the market, hinting that the anticipated 'Trump put' may take longer to materialize than traders had hoped. More notably, Bessent did not rule out the possibility of a recession during his appearance on NBC News' 'Meet the Press' on Sunday. This starkly contrasts with the typical government stance of emphasizing a positive outlook during challenging times. It may indicate that Trump is not yet ready to back down from his tariff dispute, leaving risk assets on edge. If stock prices continue to decline, it is unlikely that bitcoin will remain resilient for long, especially given the lack of positive narratives in the crypto market. According to Greg Magadini, director of derivatives at Amberdata, 'I doubt Trump will reverse his stance on tariffs and his efforts to bring back U.S. manufacturing at these price levels. I struggle to envision a scenario where risk assets crash and crypto remains unaffected, or where the VIX increases and crypto's implied volatility doesn't follow suit.' Furthermore, sentiment is deteriorating on Main Street, which could exacerbate the recent risk aversion in both the crypto and traditional markets. A chart shared by Otavio Costa, a macro strategist at Crescat Capital, highlights a record number of U.S. consumers expecting conditions to worsen over the next year. The focus on macroeconomic factors means traders will be watching Wednesday's Fed meeting for cues on the central bank's readiness to deploy stimulus. The bar is set low after Chairman Powell stated that the bank is in a wait-and-watch mode to assess the impact of Trump's policies before cutting rates. In other news, Aave Labs' Founder, Stani Kulechov, confirmed that the Aave decentralized autonomous organization had reached a consensus against introducing a new token for Horizon, an Aave initiative to integrate real-world assets into decentralized finance. Trump is reportedly set to discuss ending the Ukraine war with Russian President Vladimir Putin. Digital asset prime broker FalconX announced the completion of the 'first-ever' block trade in CME's SOL futures with StoneX as the counterparty. Stay alert! Key Events to Watch: Token Events Conferences Token Talk By Shaurya Malwa Derivatives Positioning Market Movements: Bitcoin Stats: Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether