Bitcoin plummets on US recession concerns

Bitcoin price continued to decline on Monday, dropping below the key $78,000 level, representing its lowest value in 2025 until now. If BTC price declines, support can be found at $75,000, while resistance may be encountered at $92,800. 

Ethereum price also crashed on Monday, sinking from $2,020 to the $1,860 mark. If Ethereum price declines, it may encounter support near $1,760, while if it increases, it may encounter resistance near $2,300.

Bitcoin price registered a new all-time high of $109,135 in January but has since been under pressure by increased risk aversion sentiment. Bitcoin price dropped to $80,000 over the weekend, close to its 2025 low of $78,000.

US President Donald Trump hosted on Friday the first White House crypto summit in history, which was attended by major members of the crypto industry, including prominent founders, CEOs and investors. Trump announced the creation of a national Bitcoin reserve ahead of the White House crypto summit, stressing his determination to make the US the crypto capital of the world. The US reserve will be created with Bitcoin already owned by the federal government through seizures due to criminal activities, according to a statement by crypto Czar David Sacks. From now on, the US government will cease to sell Bitcoin and will stockpile it instead as a store of value.

Bitcoin price, however, continued to retreat after Trump’s launch of a US Bitcoin reserve, as global economic concerns have lowered risk appetite. Most major cryptocurrencies are under pressure due to concerns that US President Donald Trump’s trade policies may start global trading wars. Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. The uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, putting pressure on crypto markets. Trump’s tariffs are likely to raise global inflation and lower economic outlook, thus promoting a risk aversion sentiment that puts pressure on crypto markets.

Trump’s economic policies are raising concerns that the US economic growth will slow down. Many analysts are already expressing concerns that the US will enter recession. Trump tried to downplay recession risks in an interview with Fox News over the weekend. Trump carefully avoided the word recession, stating instead that the US economy is in a period of transition.

Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve held interest rates steady at its January meeting, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%.

BTC/USD 1h Chart

ETH/USD 1h Chart

TRADE CRYPTO

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: