Bitcoin’s recent decline isn’t just a crypto issue—it’s closely following the performance of major tech stocks like Apple, Tesla, and Microsoft. Geoff Kendrick of Standard Chartered refers to this as the “Magnificent Seven plus Bitcoin” group. While Tesla has struggled, Meta and Apple have remained more resilient. Bitcoin’s movements are largely driven by broader market instability rather than internal crypto factors. Additionally, uncertainty surrounding Trump’s trade policies on Canada further pressures investor sentiment.
The crypto market is currently in a “risk-off” phase, with investors avoiding high-risk assets. Bitcoin has mirrored the downturn in growth-focused tech stocks, reflecting rising economic uncertainty and cautious market sentiment.
Fed Signals Could Spark a Rebound – A Test For Bitcoin
Kendrick says Bitcoin needs one of two things to bounce back: either stocks (especially tech) start climbing again, or the Federal Reserve hints at cutting interest rates. Bitcoin could surge if the Fed signals easier money—say, a rate cut in May. Right now, traders see a 50% chance of that happening. A stronger hint or an actual cut could be the spark crypto needs.
But if stocks stay weak and the Fed doesn’t budge, Bitcoin might fall further. Kendrick warns it could drop from $76,500 to $69,000 fast. Still, he’s optimistic long-term, predicting $200,000 by the end of 2025 if the Fed eventually eases up.
Fed Meeting and Trump’s Trade Tensions Add Pressure
The Fed’s next meeting is March 19, and most expect rates to stay the same (97% odds). No change could disappoint investors, keeping Bitcoin under strain. Unchanged rates might push Bitcoin down to $70,000 soon, dragging other coins like Ethereum and Solana with it.
In addition, new trade tariffs—like Trump’s proposed 25% tax on imports from Mexico and Canada—are spooking markets. This trade war could slow growth and hurt risky assets like stocks and crypto even more.
Some analysts even speculate that the administration’s hardline trade tactics are a deliberate gambit to pressure the Fed into cutting rates sooner. The theory is that the White House could spur the Fed to step in with rate relief by undermining market confidence and straining the economy. In fact, interest-rate futures have rapidly shifted to reflect growing expectations of Fed easing: roughly a 46% chance of a rate cut by May, rising to nearly 90% by June as of now. This suggests markets are increasingly betting that the Fed will have to respond to mounting economic and geopolitical risks in the coming months.
Equity markets have struggled amid the current mix of Fed tightening and trade disputes. For instance, the SP 500’s gain since the start of Trump’s second term is much smaller than during the equivalent period of his first term, reflecting weaker investor confidence and growth concerns.
Solana and Ethereum have already faced sell-offs alongside Bitcoin’s decline. For now, Bitcoin’s stuck waiting. A Fed shift or a stock rally could lift it up, but more uncertainty might mean more losses first.
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Key Takeaways
- Bitcoin Tracks Tech Stocks – Its decline follows major tech stocks like Tesla and Apple, reflecting broader market instability.
- Fed Rate Cuts Could Boost Bitcoin – A rate cut in May could spark recovery; traders see a 50% chance.
- Trade Tensions Hurt Markets – Trump’s 25% tariffs on Mexico and Canada add pressure to stocks and crypto.
- Bitcoin’s Uncertain Path – Without a Fed shift, Bitcoin may drop to $69K; long-term target remains $200K by 2025.
