According to ChainCatcher, according to The Block, investment research firm Bernstein said in a research report, "Bitcoin's initial reaction as a 'risk-off' asset is not surprising. This pattern often appears in the Bitcoin market (it also appeared in the flash crash in March 2020), especially because it is the only market traded on weekends. We remain calm."

“We don’t see any incremental negatives here. If the usual response to fears of a US recession is rate cuts and increased monetary liquidity, we would expect prices of ‘hard assets’ like Bitcoin (digital gold) to rise,” the analysts added.

However, Bernstein analysts said Bitcoin remains a “Trump trade” as the market tends to support the U.S. presidential candidate’s pro-crypto stance. “It’s not surprising that Bitcoin and cryptocurrencies were weak when the odds narrowed between Trump and Harris on Polymarket,” the analysts said. “We expect Bitcoin and crypto markets to remain range-bound ahead of the U.S. election and trade on catalysts such as the presidential debates and final election results.”

Overall, Bernstein expects crypto markets to respond to macroeconomic and election signals in the third quarter. However, the analysts predict that if the broader stock market recovers in response to the Fed’s response, Bitcoin and cryptocurrency markets will follow suit.