Bitcoin Faces Market Pressure Amid Economic Concerns

According to CoinDesk, Bitcoin (BTC) experienced a 2% decline over the past 24 hours, leading to a broader market downturn as major cryptocurrencies fell by up to 5%. BTC encountered resistance at $84,000 on Sunday, a critical level for potential upward movement, and was trading at just over $83,300 during Asian afternoon hours on Monday.Major cryptocurrencies such as XRP, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) saw declines of up to 5%, while BNB Chain (BNB) was the only major cryptocurrency to rise, with a 3% increase. The crypto market has remained stagnant since last week's sell-off, attributed to U.S. tariffs and worsening macroeconomic conditions. Concerns about a U.S. recession are growing due to U.S. President Donald Trump's tariffs, with traders anticipating continued market volatility as the correlation with U.S. equities persists.Despite the flat market conditions, some analysts predict upcoming volatility in altcoins and meme coins. Nick Ruck, director at LVRG Research, noted an increase in trading volume for altcoins. Ruck suggested that traders and investors might focus on altcoins in the short term for potentially better returns compared to large-cap coins like Bitcoin or Ethereum.Traders believe the recent sell-off may have been triggered by the unwinding of ETF and spot-linked trades. Augustine Fan, Head of Insights at SignalPlus, explained that the sell-off is likely driven by multi-strategy hedge fund tactics dominating the macro space. These strategies involve hedge funds employing various methods, such as arbitrage, long-short positions, and leverage, to maximize returns across asset classes.In Bitcoin's case, a common multi-strategy approach is the basis trade, where funds buy spot BTC, often through ETFs, and short BTC futures to profit from price differences. When profits from these trades diminish due to tighter spreads or market shifts, funds exit positions, selling Bitcoin and ETF shares in large quantities. This liquidation pressure likely intensified the sell-off, especially amid tariff-related volatility in the past week. However, the 'buy-the-dip' mentality remains prevalent among bullish investors. Fan added that equity valuations outside major large caps are relatively contained compared to historical averages, and economic hard data is expected to outperform the rapid decline in soft data, suggesting that the market consensus is to 'buy the dip' while navigating tariff volatility.