Bitcoin and Crypto Market Update
Bitcoin (BTC) faced a downturn on Monday, not only due to significant bearish movements across the broader cryptocurrency market but also amid struggles in U.S. stock performance. As the trading day closed, Bitcoin’s price dwindled to approximately $93,900, marking a 1.9% decline over the past 24 hours. Similarly, Ether (ETH) experienced a more pronounced dip, falling by 5.9% during the same period. The overall CoinDesk 20 Index reflected this trend, decreasing by 5.1%.
Following a week of substantial losses, an attempt by major U.S. stock indices to recover faltered on Monday afternoon. The Nasdaq composite closed down by 1.2%, while the S&P 500 index fell by 0.5%. Among the top cryptocurrencies, Solana (SOL) emerged as the worst performer, plummeting nearly 10% in the last 24 hours and an astonishing 41% over the past month. This decline can be attributed to the waning enthusiasm surrounding the memecoin phenomenon, as well as upcoming token unlocks scheduled for March and a projected 30% increase in SOL inflation due to the recent implementation of SIMD-96, which altered the network’s fee structure. At the time of writing, SOL traded at $151, having completely retraced its gains from the post-election period.
Quinn Thompson, the founder of Lekker Capital—a crypto hedge fund that leverages macroeconomic data for its trading strategies—shared insights on social media, cautioning investors about potential complacency or denial. He emphasized that $95,000 could still be a reasonable exit point compared to where he anticipates prices might be in the next 6 to 12 months. Thompson assessed the likelihood of Bitcoin reaching new highs within the next three months at 80%, and the probability of seeing new highs within the next year at 51%.
Shifting focus to the U.S. economy, Neil Dutta, head of economic research at Renaissance Macro Research, expressed concerns about increasing risks to the labor market. He noted that real incomes are stagnating, the housing market is deteriorating, and state and local government spending is tightening. Alarmingly, the prevailing market sentiment suggests no imminent economic slowdown, with the median GDP forecast hovering around 2.5%.
“If 2023 was characterized by unexpected positive surprises, 2025 may hold greater risks of negative surprises,” Dutta remarked. He elaborated, stating, “A passive tightening of monetary policy poses a significant risk, which has crucial implications for financial market investors. I anticipate a decline in long-term interest rates and a potential selloff in equity prices as risk appetite diminishes. For the economy, we should brace for worsening conditions in the job market.”
