The post Bitcoin (BTC) Faces Market Volatility Amid Economic Shifts appeared on BitcoinEthereumNews.com.

Lawrence Jengar
Jun 04, 2025 09:09

Bitcoin experiences its first major correction after a historic price surge, as macroeconomic pressures and market dynamics signal potential volatility, according to Bitfinex Alpha.

Bitcoin (BTC) is witnessing its first significant correction following a robust price rally that saw its value leap from $74,501 in April to a new all-time high of $111,880. This adjustment comes on the heels of nearly 50 days of sustained growth with minimal setbacks, according to Bitfinex Alpha. Macroeconomic Influences The correction is not solely technical; it is compounded by macroeconomic pressures. A U.S. appellate court unexpectedly postponed a lower court’s ruling that deemed certain U.S. tariffs illegal. This development pushed the 30-year bond yield over 5%, triggering widespread sell-offs in risk assets. Derivatives Market Signals Bitcoin’s derivatives market is also showing signs of overheating. Open interest in options has reached a record $49.4 billion, indicating increased activity from institutional players and hedging/speculation demands post-ATH. These factors suggest the market is bracing for heightened volatility, especially with persistent macro pressures and profit-taking by investors. Economic Weakness and Consumer Behavior The U.S. economy is revealing vulnerabilities amid trade tensions and reduced demand. April saw a significant drop in consumer spending, with households prioritizing savings over discretionary spending due to tariff concerns. Although inflation remains stable, this stability may be short-lived as businesses pass increased costs onto consumers. Trade and Labor Market Adjustments Trade dynamics have shifted, with April imports plummeting nearly 20% after early stockpiling to avoid tariff hikes in Q1, reducing the goods trade deficit by 46%. Despite short-term GDP support, stagnant business inventories signal hesitance in investment or restocking. Core capital goods orders fell by 1.3%, the sharpest decline since October, reflecting growing corporate caution. The labor market shows signs…

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Filed under: News - @ June 4, 2025 1:25 pm