Bitcoin (BTC) and the broader crypto market could shed $170 billion off their combined valuation by June, at least according to three indicators spanning macroeconomic and technical scenarios.
Let’s examine these catalysts in detail.
A massive exodus from U.S. equities could contribute to the crypto market’s downside bias.
According to Bank of America’s latest fund manager survey, investors have slashed their U.S. stock holdings by a record margin. Portfolios are now 23% underweight in American equities, a dramatic 40 percentage point drop from the previous survey.
This shift reflects growing uncertainty about the U.S. economy. The S&P 500 has already fallen 8% from its all-time high in February, with investors turning cautious amid slowing growth and policy risks.
Michael Hartnett, a strategist at Bank of America, noted that “peak US exceptionalism is reflected in record rotation out of US stocks.”
Capital is moving into European and Asian markets instead. Stock markets in China and Japan have been rallying as investors seek alternative growth opportunities.
Meanwhile, Germany is preparing to unleash billions in defense and infrastructure spending, fueling optimism in European equities. This shift reduces U.S. economic dominance.
As global investors rotate into traditional markets, crypto could experience lower capital inflows, mirroring outflows from U.S. stocks.
The Federal Reserve will likely keep interest rates steady in its upcoming policy meeting on March 19, according to CME’s FedWatch Tool, which sees a 99% odds of rates being inside the 400-425 bps range as before.
All eyes will be on the central bank’s quarterly dot plot—a key indicator of where policymakers see rates heading in the future.
Fed Chair Jerome Powell’s press conference will also be a major market-moving event as traders assess whether the Fed acknowledges rising recession risks tied to Donald Trump’s trade and tariff policies.
CME tool shows the best possibilities for a rate cut in June, with over 50% of bond traders favoring a 25 bps slashing.
Combined with the trade war and its ongoing negative demand for risk assets, the crypto market can be anticipated to move in a similar downtrend at least until June.
The total crypto market capitalization is around $2.7 trillion, but technical indicators suggest an impending decline.
The TOTAL chart is forming a rising wedge pattern, characterized by two ascending, converging trendlines. Such a wedge typically resolves when the price breaks below its lower trendline and falls by as much as the maximum height between the upper and lower trendlines.
Applying this technical rule to the crypto market’s rising wedge pattern brings its downside target to around $2.53 trillion, down by $170 billion in value.
Yashu Gola is a crypto journalist and analyst with expertise in digital assets, blockchain, and macroeconomics. He provides in-depth market analysis, technical chart patterns, and insights on global economic impacts. His work bridges traditional finance and crypto, offering actionable advice and educational content. Passionate about blockchain's role in finance, he studies behavioral finance to predict memecoin trends.