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Bitcoin's recovery, like that of other risk assets, from recent market volatility, which caused it to fall to a four-month low earlier this week, didn't last long.
Last week, US President Donald Trump's proposed tariffs and the possibility of a government shutdown provoked economic worries, including recession fears, leading to severe selloffs across asset classes, including cryptos.
Markets saw a relief rally from oversold positions at the end of last week following deep losses across assets.
For crypto's largest token, the story wasn't very different.
That recovery was not the mantra at the start of the week.
While the US avoiding a government shutdown raised some spirits, Trump's economic broadsides weighed on sentiment.
Bitcoin was last trading sideways, in what seemed more like a directionless bias, as tariffs and disappointing retail sales data added to concerns about the US economic growth outlook.
On Friday, despite smaller, less liquid digital currencies experiencing more pronounced advances, Bitcoin registered a more than 6 per cent rise to above $85,300.
XRP experienced an 8% increase, Solana exceeded 9%, and Chainlink rose over 13% at one point in the session.
The OG token, though, was back trading in the red on Monday below $84,000.
Last Tuesday, Bitcoin hit a low of about $77,000 for the first time since shortly after Trump's election in November.
That follows a peak of $109,000 on the day of Trump's inauguration in inauguration, making the OG's decline exceed 30$.
However, the pullback on Friday and the weekend is statistically insignificant as Bitcoin is still over $15,000 below its peak.
Last week's deep selloff led to heavy outflows from Bitcoin exchange-traded funds (ETFs), alongside significant liquidations of long positions within the crypto derivatives markets.
Late last month, traders in the Bitcoin options market were taking measures to protect themselves from a potential decline to $70,000 or lower.
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There was a pause in liquidations of long positions on Friday, with SoSoValue data showing Daily Total Net Open Interest (Delta) at $759.11 million suggesting market makers would have to buy more ETFs or other underlying assets to cover their bets.
The net inflows in Bitcoin ETFs reflected that view, with SoSoValue putting that figure at $32.12 million on Friday.
Still, the price play didn't last, as the largest crypto token fell at the start of this week.
The expected macroeconomic conditions reversal was put to rest by weak US consumer data on Monday.
Despite the recent crypto summit hosted by Trump at the White House, the introduction of an executive order establishing a Bitcoin strategic reserve, and the dismissal of several lawsuits against prominent crypto firms, investor attention remains fixated on broader macroeconomic factors such as tariffs and inflation, resulting in a lack of upward momentum in Bitcoin prices.
Global stocks on Monday exhibited a mixed performance amid volatile trading as market participants analyzed the latest economic data to assess the implications of the Trump administration's tariffs on the largest economy.
Retail sales experienced a slight recovery in February; however, they fell short of expectations.
A separate report indicated that factory activity in New York State experienced a significant decline this month, marking the steepest drop in almost two years.
Those are not to be taken lightly as those data likely reflect only the tip of the troubles that lay ahead.
Last week, the S&P 500 and Nasdaq posted their fourth consecutive weekly losses, and the Dow Jones Industrial Average also fell.
The S&P 500 staged a brief rebound after a $5 trillion plunge in the deep selloff, which was caused by economic worries about the ongoing tit-for-tat tariff wars, which have shown no signs of abating.
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Market participants are now seeing Trump's social media posts and commentary with tariff threats almost daily as a losing strategy.
On Friday, there was some dip buying based on the view that Wall Street stocks were in oversold territory. Economic malaise from Trump's rhetoric is having investors question that theory on valuations.
Tariff-Triggered Correction
US stocks experienced a decline into correction territory in less than 16 trading sessions.
Wall Street's concerns about the length of the selloff reflect White House officials' warnings about an extended market correction.
Given that President Trump's trade policies have the potential to disrupt the global economic system that has existed for 80 years following World War II, investors may find some guidance in looking to the past, even though history isn't always reliable.
Elsewhere
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Blockcast
Kathy Zhu has been involved with the crypto industry from both inside and out, from her days as a journalist to her current role as APAC lead at Mezo, an EVM blockchain-based platform that allows users to stake BTC assets to secure itself and serve as Bitcoin's economic layer.
In this episode, Zhu explains the evolving role of Bitcoin and its various stakeholders, including miners, institutional investors, retail holders, and developers. She also highlights how asset management firms and staking protocols have emerged to help Bitcoin holders generate passive income while maintaining custody of their assets.
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Previous episodes of Blockcast can be found on Podpage, with guests like Samar Sen ( Talos), Jason Choi (Tangent), Lasanka Perera (Independent Reserve), Mark Rydon (Aethir), Peter Hui (Moongate), Luca Prosperi (M^0), Charles Hoskinson (Cardano), Aneirin Flynn (Failsafe), and Yat Siu (Animoca Brands) on our most recent shows.
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