Crypto Market Takes a Hit as Recession Fears Rise
On Thursday, Bitcoin and most cryptocurrencies experienced a significant downturn. Teh total market value dropped by over 5.7%, settling at $2.6 trillion.
Pi Network (PI) suffered the most, hitting a new low of $0.56, down 80% from its February peak. Pepe (PEPE) and Ethena (ENA) also took hits, falling by 17% and 18%, respectively. Other altcoins like Hyperliquid, Berachain, and Bonk saw drops of over 15%. This decline coincided with rising U.S. recession odds. Polymarket now sees a 70% chance of a recession, while MetLife raised its estimate to 40%. The odds increased after Donald Trump announced tariffs on countries exporting to the U.S. Analysts warn these tariffs coudl disrupt the global economy.
Several countries, including Canada, have retaliated with their own tariffs.This economic tension is reflected in the crypto market’s fear index,which fell to 24.
The U.S. stock market mirrored this decline. the Dow Jones, Nasdaq 100, and S&P 500 all fell sharply. The fear and greed index moved to an extreme fear level of 11. However, history shows that bull markets often start when fear is at its peak. As a notable example, in March 2020, during the COVID-19 pandemic, stocks and crypto rallied after the federal Reserve intervened with rate cuts and liquidity support.
Despite the current panic, there’s hope for a rebound. if the Federal Reserve steps in with similar measures, Bitcoin and altcoins like Pi Network, Pepe, and Ethena could recover. Analysts suggest that once the panic subsides, a new rally might begin.
Key points:
- Bitcoin and altcoins dropped as recession fears surged.
- Donald Trump’s tariffs on imports increased recession odds.
- Some countries, like Canada, have already retaliated with their own tariffs.
- Historically, extreme fear has led to market rallies.
