Macro factors weigh on BTC & risk assets The weakness in Bitcoin comes as the stock market has also experienced a steep decline, with the tech-heavy Nasdaq falling over 10% from its record high into correction territory and the S&P 500 down 8.5%. Investors have sold out of risk assets across the board as trade tensions targeting major US trading partners have rattled the markets, fueling concerns surrounding the US economic outlook.
Furthermore, investment banks have also been upwardly revising the possibility of a US downturn. Given the close correlation between US stocks and Bitcoin, the cryptocurrency could struggle to thrive while equities still fall. The macro backdrop would need to stabilise, recession risks recede, and Fed rate cut optimism be revived to lift risk sentiment and risk assets. On-chain metrics turn cautious On-chain data metrics are also starting to show signs of caution. According to CryptoQuant, the Bitcoin Bull-Bear Market Cycle Indicator is at its most bearish level this cycle.
Should the price see a weekly close below this level, bears could take control. Why trade Bitcoin with PrimeXBT? Whether Bitcoin is in a deep correction phase or heading into a bear market, the increased market volatility can also be a source of opportunity.
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