Recession Fears Resurface, Affecting Bitcoin and Crypto Markets

Concerns about a potential U.S. recession have negatively affected the cryptocurrency market, with Bitcoin and other cryptos experiencing significant declines.

Following heightened tensions in the Middle East, Ethereum's price fell below $3,000, marking a 6% drop, with a weekly decline of over 8.5%.

Ethereum's Prospects

The introduction of spot Ethereum ETFs has led to substantial outflows, alarming investors.

Economist Peter Schiff highlighted a 15% drop in Ethereum ETF transactions over two weeks, suggesting ETH could fall to $2,000.

On Friday, spot Ethereum ETFs saw a net outflow of $54.3 million, with Grayscale’s ETF losing $61.4 million, while Fidelity FETH gained $6 million.

Schiff pointed out that a U.S. recession could increase federal deficits, weaken the dollar, lower real interest rates, and raise inflation, possibly benefiting gold prices.

Former President Donald Trump also suggested that cryptocurrencies could help pay off the $35 trillion debt.

Altcoin Market Trends

Altcoins are also facing corrections of 5% to 10%. Despite some whales viewing the decline as a buying opportunity, trading volumes remain low.

CryptoQuant analyst Kate Young Ju noted a Chinese buying wall for altcoins but emphasized the low trading volumes.

She believes the current market conditions are favorable for research ahead of an anticipated bull season.

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