Bitcoin turns bearish as its weekend gains completely evaporate. Negative momentum was briefly halted thanks to Trump’s Crypto Reserve announcement, but the underlying macroeconomic problems remain.

Trump’s tariffs against its closest trading partners are still set to go through, and the Federal Reserve is predicting the worst decline in US GDP since the pandemic began. A broader recession will also hurt the crypto industry.

Bitcoin Drops 10% As Recession Seems Near

The price of Bitcoin has shown extreme volatility over the past few days. Last week, the Crypto Fear and Greed Index hit its lowest level since 2022, and Bitcoin looked very bearish due to several key factors.

Yesterday, Trump announced a crypto reserve that caused token prices to pump. However, that forward momentum has completely vanished today.

There are a few reasons that Bitcoin is looking so bearish right now. Essentially, Trump’s announcement may have only slapped a bandage on a very serious wound.

Last week, Bitcoin ETFs had their worst week ever, with $2.7 billion in outflows, as the Federal Reserve Bank of Atlanta predicted a 1.5% GDP decrease. Today, it has become even more pessimistic.

The Fed is now predicting that the US GDP will shrink 2.8% by the end of Q1 2025. From an economic perspective, this is apocalyptic compared to its predictions four weeks ago, which showed 3.9% growth.

Macroeconomic Factors Don’t Look Good for Crypto

The US economy hasn’t shrunk that much since the early days of the Covid-19 pandemic five years ago. These macroeconomic factors are a significant signal that Bitcoin might turn bearish in the short term. In fact, market liquidations have hit nearly $800 million today.

Another important factor contributing to Bitcoin’s volatility is President Trump’s proposed tariffs. Some analysts have theorized that they aren’t the main cause, and that’s probably true.

However, the crypto market crashed when Trump recently announced 25% tariffs on the EU, joining ones on Canada, Mexico, and China.

“Trump: no room left for deal on tariffs on Mexico, Canada. [He] reiterates plan to double China tariff from 10% to 20%,” claimed Walter Bloomberg via social media.

In other words, macroeconomic factors are largely driving market sentiment in the crypto industry. Since the Bitcoin ETFs were approved, crypto has been well-integrated into traditional finance.

If the US economy enters a recession, however, the downsides of that integration will fully reveal themselves.

The crypto market continues to face selling pressure as digital asset investment products recorded their largest weekly outflows.

Sentiment remains sour, with Bitcoin (BTC) barely holding above the psychological level of $90,000 despite President Donald Trump’s crypto reserve policy.

Crypto Outflows See New Records

Over the past week, crypto outflows reached a staggering $2.9 billion, bringing the three-week total to $3.8 billion. This marks the third consecutive week of capital exiting the crypto sector, and it is a stark contrast to the preceding 19-week inflow streak, which saw $29 billion pour into the market.

The latest CoinShares report ascribes the negative flows to weakening sentiment across the crypto market. It cites factors such as the recent Bybit hack among key factors contributing to the mounting outflows. Others include a more hawkish stance from the Federal Reserve and broader macroeconomic concerns.

“We believe several factors contributed to this trend, including the recent Bybit hack, a more hawkish Federal Reserve, and the preceding 19-week inflow streak totaling US$29bn. These elements likely led to a mix of profit-taking and weakened sentiment toward the asset class,” read an excerpt in the report.

As BeInCrypto reported, the hack, which resulted in millions of dollars stolen, has shaken investor confidence. This reinforces fears over security vulnerabilities in the crypto space. Additionally, the Federal Reserve’s latest comments signaled a cautious outlook on inflation and the US GDP, leading to broader market uncertainty and a decline in risk appetite.

Against this backdrop, CoinShares’ researcher James Butterfill highlights Bitcoin as the hardest hit by the bearish sentiment, experiencing outflows of $2.59 billion last week. Ethereum also suffered, recording its highest weekly outflows at $300 million. Other major altcoins followed suit, with Solana experiencing outflows of $7.4 million.

Nevertheless, short Bitcoin positions saw minor inflows totaling $2.3 million, suggesting some investors are positioning themselves for further downside.

Despite the overall negative sentiment, some digital assets saw inflows. Sui emerged as the best performer, attracting $15.5 million, while XRP followed with $5 million in inflows. These gains suggest that while the broader market is under pressure, certain projects continue to garner investor interest.

For XRP, the sentiment remains bullish, steered by increasing anticipation of a US SEC (Securities and Exchange Commission) decision on an XRP ETF. The deadline for the SEC to approve or reject certain ETF applications has begun. Investors remain hopeful that XRP will gain regulatory clarity. Including XRP in Trump’s crypto reserve in the US could enhance this sentiment.

Notwithstanding, the latest round of outflows follows a concerning trend developed over the past few months. The previous week saw crypto outflows of $508 million, further exacerbating investor fears. Before that, the Federal Reserve’s hawkish rhetoric and concerning Consumer Price Index (CPI) data had already triggered the first major crypto outflows of 2025, with $415 million exiting the market.

This series led some analysts to point to macroeconomic factors as the primary driver of the selloff, with investor sentiment still showing fear.

However, others argue that external policies like President Donald Trump’s tariffs have contributed to the uncertain market environment, stoking inflation fears and making risk assets like crypto less attractive.

A competing perspective suggests that structural shifts, including cash and carry trading strategies, may contribute to Bitcoin’s recent volatility.

As of this writing, Bitcoin was trading for $93,095, up by over 8% since Monday’s session opened.

As Bitcoin (BTC) hovers near critical price levels, crypto investors focus on a packed week of US economic data releases that could sway market sentiment.

From employment figures to Federal Reserve Chair Jerome Powell’s insights, these macroeconomic indicators are poised to influence Bitcoin’s trajectory.

US Macroeconomic Data To Watch This Week

Crypto market participants, traders, and investors have several US economic events to watch this week. This follows a notable sentiment shift during the weekend, driven by US President Donald Trump’s move to commission a crypto reserve.

The crypto market’s reaction to the president’s executive order reflects Bitcoin’s growing place in the United States macroeconomic space. Here is a breakdown of the five key data points to watch and their potential impact on the world’s leading cryptocurrency.

ADP Employment Report

The week kicks off with the ADP National Employment Report on Wednesday. This US economic data is a key gauge of private-sector job growth. After the previous 183,000, economists forecast February’s jobs data slowing down to around 143,000. This reflects a continued cautious hiring environment, as President Trump’s economic policies remain a topic of interest.

A stronger-than-expected report could signal resilience in the labor market, potentially boosting the US dollar and pressuring Bitcoin as investors pivot to traditional assets. Conversely, a weaker print might fuel expectations of Federal Reserve rate cuts, lifting BTC as a risk asset.

“The focus is on jobs data this week, with ADP on Mar 5 expected at 143,000 and non-farm payrolls on Mar 7 forecasted at 160,000. If those hit or beat, the bulls will likely drive a 1-2% gain, fueled by optimism in tech and a belief in a soft landing,” one user commented.

However, the outcome remains uncertain, with historical trends showing mixed reactions in crypto markets to ADP surprises.

Initial Jobless Claims

Thursday’s Initial Jobless Claims report will offer a real-time snapshot of the US labor market’s health. The previous week’s figure increased to 242,000, beating the consensus of 225,000, signaling economic softening.

According to data on MarketWatch, analysts anticipate a slight uptick to around 243,000 for the week ending March 1. Lower claims could reinforce confidence in the economy, potentially reducing Bitcoin’s appeal as a hedge against uncertainty.

Higher claims, however, might stoke fears of a slowdown, driving investors toward BTC as a safe-haven alternative.

US Unemployment Rate

Friday’s US jobs report, including the unemployment rate, is a market marquee event. Forecasts peg job growth at 160,000 for February, up from January’s 143,000, with the unemployment rate forecasted at 4.1%, higher than the previous 4.0%.

Strong job growth could dampen hopes for monetary easing, pressuring Bitcoin as higher interest rates make yield-bearing assets more attractive. A disappointing report, on the other hand, might bolster BTC’s narrative as a hedge against economic weakness.

Jerome Powell Speech

Federal Reserve Chair Jerome Powell’s upcoming speech is also a wildcard. It features US economic data that could influence crypto sentiment this week. His speech could set the tone for monetary policy expectations.

His remarks, scheduled for Friday, will be parsed for clues on rate cuts in 2025, especially after the Fed’s latest interest rate decision. Dovish hints—suggesting more aggressive easing—could propel Bitcoin higher by weakening the dollar and boosting risk appetite. A hawkish stance, emphasizing inflation control, might weigh on BTC as borrowing costs rise.

Notably, Powell recently told the Senate Banking Committee that he is in no rush to cut interest rates, maintaining a cautious economic approach. Nevertheless, it is impossible to ignore the growing concerns among US policymakers about President Trump’s policies.

“Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters,” the Fed’s previous minutes stated.

Consumer Credit

Friday’s Consumer Credit data will shed light on American borrowing trends by rounding out the week. Following a $40.85 billion increase in December, a sharp rise could signal strong consumer confidence, potentially reducing Bitcoin’s allure as disposable income flows elsewhere.

A slowdown in credit growth might suggest economic caution, nudging investors toward BTC as a store of value amid uncertainty. Nevertheless, data on MarketWatch indicates a modest median forecast of $12 billion.

As of this writing, Bitcoin was trading for $92,811, up by over 8% since Monday’s session opened. With these five data points looming, volatility is all but guaranteed.

Meanwhile, traders and investors are waiting expectantly for the crypto summit on Friday at the White House, as President Trump aims to position the US at the forefront of the growing digital asset industry.

“While I anticipated the pro-American crypto asset reserve that focused specifically on American blockchains, I didn’t trade the news. This is the beta trade. Look at the tokens that have not been added yet before the summit on Friday and consider holding some in your portfolio. It is a pretty speculative trade though because while Trump did hint there would be more added, those that aren’t chosen will likely take a reverse hit,” one X user quipped.