Trump drives recession and bitcoin falls again

Fears of an economic recession driven by Trump's policies and uncertainty in traditional markets drag Bitcoin to its fifth consecutive day of losses. Is it time to accumulate or flee?

The price of bitcoin fell 2.65% on Monday, closing at $78,595, marking its fifth consecutive day in the red. The uncertainty generated by President Donald Trump's statements about a possible economic recession, added to the fall of traditional markets, caused a flight to safe assets. The crypto market lost $90.23 billion in a single day, as investors prepare for a possible rate cut by the Federal Reserve.

Bitcoin price fell 2.65% on Monday, closing at $78,595, marking its fifth consecutive day in the red. / Tradingview

Trump's impact on risk markets

President Donald Trump's statements about a "transition period" and the economic "pain" associated with tariffs shook the markets. Bitcoin, perceived by many as a risk asset, has not been the exception. The total crypto market capitalization dropped to $2.47 trillion, while 10-year US Treasury bond yields fell 2% to 4.21%.

On the other hand, 10-year Treasury bonds rose to 103.08, gaining 0.69%, reflecting a migration of capital to safer assets. Trump, with his tariff and spending cut policy, is driving down not only traditional markets but also the crypto ecosystem.

The Federal Reserve in the crosshairs: A rate cut to the rescue?

Although the Federal Reserve is expected to keep interest rates stable at 4.50% at its next meeting on March 19, bets on a cut to 4.25% by May 7 rose to 47.2%. In addition, 50.5% of participants in the federal funds market expect a cut on June 18.

A potential rate cut could be a lifeline for Bitcoin and cryptocurrencies, as they have historically responded to looser monetary policies with hikes. However, as long as Bitcoin remains coupled to traditional markets, its recovery could be slow.

On-chain indicators: Opportunity for accumulation?

On-chain indicators paint a mixed picture for Bitcoin. The MVRV-Z at -1.13 (negative) suggests that the price is in the oversold zone, which has historically been a buy signal. However, the STH-MVRV at 0.92 (negative) indicates that short-term investors are in the red, with an average cost basis of $92,000, which could lead to selling pressure.

Despite the drop, 6,142.36 BTC were withdrawn from centralized exchanges in the past 30 days, suggesting that some investors are taking advantage of low prices to accumulate. This accumulation in self-custody wallets reflects confidence in a future recovery.

Futures and Liquidity: Market Deleveraging

Total Bitcoin futures open interest fell 3.66% over the past 24 hours to $45.72 billion, its lowest level since Oct. 30. This deleveraging indicates a reduction in market liquidity, which could prolong the consolidation or correction phase.

What to Expect in the Short Term?

Bitcoin is at a crossroads. On the one hand, on-chain indicators suggest that the market is in the oversold zone, which could attract long-term buyers. On the other hand, economic uncertainty and coupling with traditional markets maintain bearish sentiment.

If the Federal Reserve decides to cut interest rates in the coming months, Bitcoin could find bullish momentum. However, as long as the price remains below the EMA200 on the daily chart, the sentiment will remain predominantly bearish.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrencies are volatile assets; invest responsibly and do your own research.