Americas Crypto Daybook: Macro Uncertainty Exacerbates Bitcoin's Decline

By Omkar Godbole (all times ET unless specified otherwise) Bitcoin's downward trend persists, with the cryptocurrency falling below $80,000 early on Friday and extending its February decline to over 20%. This triggered a sharp decline in the broader cryptocurrency market, with ether dropping below $2,100, a level it had maintained since August. This volatility is not unique to crypto. The increased fluctuations in cryptocurrencies mirror trends in traditional markets, as evidenced by the 10% increase in the Volmex BVIV, which tracks the 30-day implied volatility in bitcoin, and the equal rise in the MOVE index, which measures the implied volatility of U.S. Treasury notes. The VIX, a gauge of Wall Street's fear, has increased by 14%. These movements, combined with a sell-off in growth-sensitive commodity currencies such as the Australian, New Zealand, and Canadian dollars, indicate jitters in the macroeconomy, primarily driven by renewed concerns over potential Trump tariffs. This has led to a rotation towards less volatile assets. According to Griffin Ardern, head of options trading and research at crypto financial platform BloFin, 'U.S. domestic policies have become unstable, and the White House appears to be taking advantage of this instability. Given the challenges investors face in obtaining accurate forward-looking guidance, many are more inclined to hold low-volatility assets... Traders need to liquidate positions to reduce their exposure to specific assets before transitioning to other markets, which explains the decline across almost all asset classes, including cryptocurrencies.' Volatility is expected to remain elevated, with President Donald Trump scheduled to speak later on Friday. In the meantime, those anticipating a significant rebound in risk assets based on personal consumption data may be disappointed, as anticipated soft readings could be overshadowed by tariff concerns and rising forward-looking inflation metrics. Although the outlook appears gloomy, more positive developments could emerge once the macro uncertainty subsides. Notably, there was progress on the regulatory front this week, with the SEC dropping charges against Uniswap, a leading decentralized exchange, and considering the same for its issues with Consensys. As Evgeny Gaevoy, CEO of leading market maker Wintermute, pointed out at Consensus Hong Kong last week, many are overlooking the evolving attitude of the SEC, and this is a factor the market has yet to fully price in. Additionally, the decline in the basis of CME bitcoin and ether futures, a sign of weakening demand, has stalled. From a technical analysis perspective, bitcoin is rapidly approaching a potential demand zone. So, stay alert! What 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