Bitcoin Plunges as Risk Assets Experience Broad Sell-Offs Globally

Economic

Summary:

Bitcoin price experienced a sharp decline due to risk-off sentiment in the global markets, causing a broad selloff in risk assets on Tuesday.

Bitcoin price experienced a significant drop this week amid a widespread selloff in risk assets. The world’s largest crypto token fell more than 8% in the past two days to just above $88,000 (€83,626) during Wednesday's Asian session, the lowest level since 15 November.

Bitcoin slumped nearly 20% from its peak amid Trump’s inauguration on 20 January. Alongside the Bitcoin selloff, other major tokens, such as Ethereum, Cardano, and Solana, have all declined by more than 10% during the same timeframe.

Risk-off sentiment has been a primary driver of the sharp decline in cryptocurrencies as economic data deteriorated in the US, while Trump’s expanding tariff threats and a series of political developments increased uncertainties in the financial markets.

Additionally, a major crypto hack targeting the Dubai-based exchange Bybit has raised concerns about blockchain security.

Markets were also awaiting a fresh catalyst to reignite enthusiasm in cryptocurrencies.

Risk-off sentiment prevailed in global markets

The US technology sector, which typically moves in tandem with cryptocurrencies, was the worst performer on Wall Street, recently.

Tesla’s shares tumbled more than 8% on Tuesday following news that its car sales nearly halved in Europe last month, weighing on the broader sector performance.

Nvidia’s earnings will be closely watched later today.

Additionally, the recent US economic data showed that consumer confidence fell the most since August 2021 this month, reflecting a weakened economic outlook amid Trump’s slew of tariff announcements, particularly on the US’s two biggest trading partners-Mexico and Canada.

Signs of a resurgence in inflation, accompanied by the Fed’s hawkish shift, have also weighed on sentiment.

“On the surface, this is about weak data and the uncertainty stemming from the Trump administration's policy agenda and how that may impact economic activity,” Kyle Rodd, a senior market analyst at Compital.com Australia, wrote in an email.

Risk-off dominated the global markets across all asset classes on Tuesday, with equities extending losses, oil prices tumbling, gold retreating, and the US dollar weakening.

Government bond yields fell sharply, with the US 10-year Treasury yield sliding to its lowest since mid-December last year. Government bonds are considered a safe-haven asset as yields move inversely to bond prices.

Bybit hack dampens crypto trustworthiness

Investor confidence in cryptocurrencies has been shaken following the largest-ever crypto hack targeting Bybit on 21 February, in which nearly $1.5 billion worth of Ether was stolen.

Ether powers the Ethereum blockchain network. The Dubai-based platform is one of the world's largest crypto exchanges, with an average daily trading volume exceeding $36 billion.

Bybit CEO Ben Zhou posted on X that a hacker had gained control of an Ether cold wallet and transferred all tokens to an unknown address.

However, he reassured investors that the company would cover the loss and that all withdrawals remained open.

Source: Euronews

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Warren Takunda

Economic

The bank identifies Pound Sterling as one of the most vulnerable currencies among G10 peers, driven by structural weaknesses and heightened sensitivity to investor risk appetite.

"Currently, this yields NZD and GBP as most sensitive to risk-off, while the JPY and CHF could outperform in the G10," says Joshua Wilcock, FX Strategist at BNP Paribas.

BNP Paribas highlights that the Pound's elevated carry status has increased its exposure to equity market fluctuations, making it more sensitive to deteriorating global risk conditions.

The warning comes at a time of risk-on market conditions consistent with an ongoing bull market in stocks, which have facilitated GBP exchange rate gains.

This week's setback in the Pound-to-Euro exchange rate recovery is consistent with a decline in the U.S. S&P 500 index, which is taken as a proxy for global investor sentiment.

Pound Sterling Highly Exposed to a Market Correction_1

Above: GBPEUR (top) and the U.S. S&P 500 index.

The decline has been relatively shallow, but the sensitivity confirms the Pound's vulnerabilities to wider sentiment and losses would be far more significant in a bigger market correction.

"The GBP stands out in the screen as it suggests scope for a change in behaviour, having become one of the high yielders in G10," says Wilcock. "For the GBP, vulnerabilities are revealed consistently across the variables."

One vulnerability is the UK’s worsening net international investment position (NIIP) and persistent current account deficit have left the currency reliant on foreign capital inflows.

"The persistent current account deficit and wide fiscal deficit has created a reliance on foreign investor inflows," explains Wilcock.

The research also underscores sterling’s vulnerability to a broader economic slowdown alongside emerging market high-yielders such as the Brazilian real and the Hungarian forint.

BNP Paribas says this leaves the path for GBP outperformance "a narrow one considering uncertainties around global trade and financial conditions."

"For the GBP, with this sensitivity to risk-off we still think the GBP may be underhedged for GBP downside, so we position for this via a 1.15 GBPUSD digital put," says Wilcock.

In contrast, the Japanese yen and Swiss franc are expected to outperform in risk-off conditions due to their safe-haven status.

Source: Poundstrerlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Donald Trump on Tuesday opened yet another front in his assault on global trade norms, ordering a new investigation into possible tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, semiconductors and a wide range of consumer goods.

Trump, looking to thwart what his advisers see as a move by China to dominate the global copper market, signed an order directing commerce secretary Howard Lutnick to start a new national security investigation under Section 232 of the Trade Expansion Act of 1962, the same law that Trump used in his first term to impose 25% global tariffs on steel and aluminum.

A White House official said any potential tariff rate would be determined by the investigation, adding that Trump preferred tariffs over quotas.

The White House trade adviser Peter Navarro said the investigation would be completed quickly, “in Trump time”.

Navarro claimed China was using state subsidies and economic influence to gain control over global copper production, in much the same way it now dominates steel and aluminum production.

That said, the countries set to be most affected by any new US copper tariffs would be Chile, Canada and Mexico, which were the top suppliers of refined copper and copper articles in 2024, according to US Census Bureau data.

“Like our steel and aluminum industries, our great American copper industry has been decimated by global actors attacking our domestic production,” Lutnick, the US commerce secretary, said in a statement. “To build back our copper industry, I will investigate the imposition of possible tariffs.“

Lutnick said US industries and national defense depended on copper and “it should be made in America, no exemptions, no exceptions”.

“It’s time for copper to come home,” Lutnick added.

The White House official said the investigation would look at imports of raw mined copper, copper concentrates, copper alloy, scrap copper and derivative products made from the metal. The official declined to identify any specific derivatives, saying that would prejudge the investigation.

The official added that the Department of Energy recognized copper as a critical material in the medium term due to increased demand for solar energy technologies and global electrification, noting that it was the second most widely used material in US weapons platforms.

The official said based on current demand for electric vehicles and power-hungry artificial intelligence applications, there will be a US copper shortage in the future, and the US cannot develop adequate copper smelting and refining capacity unless there is a reasonable certainty of long-lasting trade protection for the sector.

The move is the latest effort by Trump to build a tariff wall around the nation’s economy as part of his drive to rebuild a long-declining US manufacturing base and redraw decades of trade relationships.

Trump said on Monday that separate 25% general tariffs on imports from Mexico and Canada were “on schedule” ahead of a 4 March implementation deadline despite efforts by both to avoid them by securing their US borders and halting the flow of fentanyl, the deadly opioid.

Source: Theguardian

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Stocks

U.S. Treasury yields regained some lost ground on Wednesday after the House of Representatives advanced President Donald Trump's tax-cut agenda, while the dollar and oil prices struggled on mounting worries over U.S. growth.

U.S. stock futures rebounded after a mixed session on Wall Street, with Nasdaq futures rising 0.6%, while S&P 500 futures gained 0.4%.

EUROSTOXX 50 futures similarly edged 0.66% higher, while FTSE futures tacked on 0.7%. DAX futures jumped 0.84%.

U.S. copper prices surged more than 4% while those elsewhere fell overnight after Trump on Tuesday ordered a probe into potential new tariffs on copper imports.

The Republican-controlled U.S. House of Representatives late on Tuesday narrowly passed Trump's $4.5 trillion tax-cut plan, sending the budget resolution to the Senate, where Republicans are expected to take it up.

U.S. Treasury yields advanced on the news as investors anticipate more debt issuance ahead, with the benchmark 10-year yield rising 3 basis points to 4.3289%.

The two-year yield similarly rose about 3 bps to 4.1271%.

"(The plan) moved through just a little bit quicker than people were expecting," said Tony Sycamore, a market analyst at IG. "You can see the way that yields are moving, it certainly caught them off guard a little bit."

Yields had fallen to their lowest in months in the previous session as traders ramped up bets of more Federal Reserve rate cuts this year on growing concerns over the outlook for the world's largest economy.

Data on Tuesday showed U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February - the latest in a string of surveys suggesting that businesses and consumers were becoming increasingly rattled by the Trump administration's policies

"We're not surprised that we're getting these weak consumer confidence numbers. What we are surprised about, though, is that we're getting them now, before consumers see the impact of tariffs," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (CBA).

Fed funds futures now point to more than 50 bps of easing priced in by year-end, up from about 40 bps a week ago.

That in turn weighed on the dollar, particularly against the yen. The greenback slid to an over four-month low against the Japanese currency in the previous session.

It last traded 0.27% higher at 149.42 yen , thanks to the rebound in U.S. Treasury yields.

In other currencies, the euro eased 0.21% to $1.0491, but was not far from a one-month high. Sterling was similarly near a two-month top and last bought $1.2637.

"What we're seeing is the dollar weakens because of this soft economic data, but at some point, you hit a threshold where you get safe-haven flows into the U.S. dollar," said CBA's Capurso.

"So if things get really, really bad in America, let's say the market starts pricing in a recession or something close to a recession, the U.S. dollar always goes up."

Fears of slowing U.S. growth also cast a shadow over the outlook for oil demand.

Brent futures were up 0.25% to $73.20 a barrel having fallen more than 2% in the previous session, while U.S. West Texas Intermediate (WTI) crude <CLc1> rose 0.23% to $69.09 per barrel, reversing some of Tuesday's 2.5% slump.

Gold was little changed at $2,915.09 an ounce.

NVIDIA EARNINGS AWAITED

AI poster child Nvidia reports its quarterly earnings later on Wednesday, which could offer clarity on demand and justify the sector's lofty valuations.

Investor scepticism has grown over the billions that U.S. tech firms have channelled into AI infrastructure due to slow payoffs and breakthroughs at China's DeepSeek.

"Any signs of weakness in Nvidia's report could have outsized effects on investor sentiment towards AI stocks as a whole," said Saxo's global head of investment strategy Jacob Falkencrone.

"This earnings report isn't just about Nvidia ... it's about whether the AI revolution can maintain its breakneck pace."

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan advanced 1.14%, helped by a rally in Chinese markets. Japan's Nikkei fell 0.4%.

Hong Kong's Hang Seng Index surged more than 3%, with the Hang Seng Tech index also rising 4.75%.

The CSI300 blue-chip index <.CSI300> edged 0.6% higher, while the Shanghai Composite Index gained 0.74%.

Chinese stocks have been on a tear over the past few weeks, driven by DeepSeek's AI breakthrough that reignited investor interest in China's technology capabilities.

However, the rally hit a speed bump earlier this week on news that the Trump administration plans to tighten semiconductor curbs on China and after the U.S. president signed a memorandum directing the Committee on Foreign Investment in the U.S. to restrict Chinese investments in strategic areas.

"It is recklessly complacent to brush off all tariff threats from the U.S. as a bluff that is meant as leverage," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.

"Especially not in China's case. Fact is, the U.S. intends to inflict significant industrial pain that compromises technological advantage and manufacturing clout or capacity."

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

The ten-year U.S. bond yield has fallen below 4.4%, its lowest since December 12, and money markets show investors now see 54 basis points of easing from the Fed by the end of the year, compared to 48bp on Monday.

This means there are now two 25bp cuts expected this year, confirming investors think the U.S. economy is slowing. It also susggests they think the government's efforts to lower the country's debt will pay off.

Elon Musk's DOGE programme is snipping away at the deficit, which reached 6.4% of the GDP in 2024, but analysts say that the amounts being achieved so far are relatively small as a percentage of total expenditure.

However, DOGE's message is bigger than the actual cuts it delivers: that Trump is determined to lower the country's debt.

Deficits, Tariffs, and DOGE: Why the Dollar’s Strength Is Fading_1

Image courtesy of American Banker.

Trump's recent focus on bond yields and willingness to talk publicly about bringing down military spending signals that the government is determined to make significant inroads into America's balooning budget deficit.

If the government succeeds in shrinking the deficit, the Treasury will need to issue less debt (bonds). This means supply outstrips demand, driving up bond values and lowering their yield (or interest rate).

The Dollar has a positive relationship with bond yields, which explains why it is falling alongside the decline in Treasury bond yields:

Deficits, Tariffs, and DOGE: Why the Dollar’s Strength Is Fading_2

Above: USD/GBP tracks the U.S. ten-year bond yield lower.

It is clear yields are important for Trump. Treasury Secretary Scott Bessent said on February 06 that when Trump speaks of wanting lower interest rates, he is referring to the yield on the 10-year Treasury and not the short-term rate set by the Fed.

Musk also confirms the administration is highly focused on debt and yields, saying in a conversation hosted on X: "The bond markets do not currently reflect the savings that I'm confident we can achieve. If you're shorting bonds, I think you’re on the wrong side of the bet."

But DOGE is doing more than cutting spending, it is raising uncertainty and unemployment, which is slowing the economy and is deflationary.

For this reason, markets have recently adopted the view that DOGE's efforts are consistent with more Fed interest rate cuts, which will weigh on bond yields and the Dollar going forward.

Anna Wong, the chief U.S. Economist at Bloomberg Economics, says DOGE’s cuts will likely appear first in lower GDP growth as early as the second quarter, ahead of a sharp rise in the unemployment rate in the second half.

Markets are forward-looking, and the declining Dollar and bond yields show investors are preparing for this eventuality.

The Dollar was the best-performing major currency through the second half of 2024 as U.S. economic exceptionalism came to the fore with a solid run of above-consensus data releases.

However, Torsten Sløk, Chief Economist at Apollo Global Management, cautions that "the near-term downside risks to the economy and markets are growing."

Deficits, Tariffs, and DOGE: Why the Dollar’s Strength Is Fading_3

Above: There has been a noticeable deterioration in confidence in 2025, according to the Conference Board's confidence survey.

"The incoming data remains strong," Sløk said. "But we are starting to worry about the downside risks."

He explains that elevated policy uncertainty centred on the DOGE programme will begin to have a negative impact on capex spending and hiring decisions.

"Torsten Slok, who has been adamant and correct on the U.S. economy for a long time (bullish) is turning more cautious and I think that’s worth paying attention to," says Brent Donnelly, founder of Spectra Markets.

Can tariffs boost the Dollar? After all, Trump remains committed to them and the FX playbook says they are by their very nature inflationary, which is USD-supportive.

"The USD remains poised to capitalise if tariffs arrive," says Daragh Maher, Senior FX Strategist at HSBC.

However, markets are showing themselves to be increasingly less sensitive to tariff headlines than at the turn of the year, with the USD falling on the day Trump confirmed tariffs on Mexico and Canada were still likely to proceed on March 03.

The market reaction confirms that the deflation posed by DOGE and spending cuts are more relevant than the inflationary nature of tariffs.

Quite simply, fears of an economic slowdown outweigh any tariff-inspired inflation and tip the scales against the Dollar.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Alex

Economic

Forex

GBP/USD is attempting a fresh increase from the 1.2600 zone. EUR/GBP is gaining pace and might extend its upward move above the 0.8300 zone.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

The British Pound is attempting a decent increase above the 1.2620 zone against the US Dollar.

There is a connecting bullish trend line forming with support at 1.2625 on the hourly chart of GBP/USD at FXOpen.

EUR/GBP started a fresh increase above the 0.8285 resistance zone.

There is a major bullish trend line forming with support at 0.8300 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a downside correction from the 1.2690 zone. The British Pound traded below the 1.2650 zone against the US Dollar.

A low was formed near 1.2605 and the pair is now attempting a recovery wave. There was a break above the 50% Fib retracement level of the downward move from the 1.2690 swing high to the 1.2605 low.

The pair even spiked above the 76.4% Fib retracement level of the downward move from the 1.2690 swing high to the 1.2605 low and settled above the 50-hour simple moving average.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2675. The next major resistance is near the 1.2690 level. If the RSI moves above 60 and the pair climbs above 1.2690, there could be another rally. In the stated case, the pair could rise toward the 1.2750 level or even 1.2820.

On the downside, there is a major support forming near 1.2625. There is also a connecting bullish trend line forming with support at 1.2625. If there is a downside break below the 1.2625 support, the pair could accelerate lower.

The next major support is near the 1.2605 zone, below which the pair could test 1.2560. Any more losses could lead the pair toward the 1.2525 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh increase from the 0.8265 zone. The Euro traded above the 0.8285 level to move into a positive zone against the British Pound.

The EUR/GBP chart suggests that the pair settled above the 50-hour simple moving average and 0.8300. Immediate resistance is near 0.8305. The next major resistance for the bulls is near the 0.8320 zone.

A close above the 0.8320 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8365. Any more gains might send the pair toward the 0.8400 level in the coming days.

Immediate support sits near a major bullish trend line at 0.8300 and the 23.6% Fib retracement level of the upward move from the 0.8275 swing low to the 0.8305 high. The next major support is near the 0.8285 zone.

The 61.8% Fib retracement level of the upward move from the 0.8275 swing low to the 0.8305 high is also at 0.8285. A downside break below the 0.8285 support might call for more downsides.

In the stated case, the pair could drop toward the 0.8265 support level. Any more losses might send the pair toward the 0.8240 level in the near term.

Source: ACTIONFOREX

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Stocks

Asian shares were mixed on Wednesday, with Chinese markets gaining after Wall Street extended its losses on worries over inflation and tariffs.

The rally in Chinese shares was led by gains for technology companies. Hong Kong’s Hang Seng jumped 3.4% to 23,811.21, while the Shanghai Composite index added 0.8% to 3,372.74.

Hong Kong-traded shares in food delivery company Meituan surged 10.2%, while e-commerce giant Alibaba gained 5.7%. Gaming and technology company Tencent Holdings advanced 3.4% and search engine and AI company Baidu was up 3.7%.

Such companies have regaining some strength as Beijing has indicated stronger support for the private sector after years of crackdowns on tech companies.

Elsewhere in the region, Tokyo’s Nikkei 225 index shed 0.8% to 37,928.96, as investors sold shares in big Japanese trading companies following gains driven by billionaire Warren Buffett’s disclosure in his annual letter to shareholders that he increased Berkshire Hathaway’s investments in those companies.

The Kospi in Seoul rose 0.4% to 2,641.09.

Australia’s S&P/ASX 200 gave up 0.1% to 8,240.70. In Taiwan, the Taiex gained 0.5%. Thailand’s SET was up 0.9%.

On Tuesday, some of Wall Street’s brightest stars lost more of their shine after a report said U.S. households are getting more pessimistic about the economy.

The S&P 500 fell 0.5% to 5,955.25, falling as much as 1.2% during the day.

The Nasdaq composite sank 1.4% to 19,026.39 as several influential Big Tech companies lost momentum and screeched lower. But the majority of stocks nevertheless rose, which helped the Dow Jones Industrial Average add 0.4% to 43,621.16.

Nvidia fell 2.8%, while Tesla tumbled 8.4%.

Nvidia is due to announce its profit on Wednesday, its first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips.

That called into question all the spending Wall Street had assumed would go into not only Nvidia’s chips but also the ecosystem that’s built around the AI boom, including electricity to power large data centers.

Weaker than expected economic reports have siphoned away the momentum that took Wall Street to repeated records in recent months.

“What was supposed to be a soft-landing narrative is quickly turning into a hard dose of reality,” Stephen Innes of SPI Asset Management said in a report.

“The U.S. economic backdrop is shifting sharply lower, a stark contrast to the euphoria that defined the start of ’25. And now, investors are scrambling to adjust their positioning on the fly,” he said.

The U.S. economy still appears to be in solid shape, and growth is continuing at the moment. But for the first time since June, a measure of consumers’ expectations for the economy in the short term fell below a threshold that usually signals a recession ahead, according to The Conference Board. The increase in pessimism was broad-based and carried across both higher- and lower-income households, as well as older and younger ones.

Wall Street tracks consumer confidence because strong spending is what helps keep stave off recession. And Tuesday’s report echoed what an earlier report from the University of Michigan suggested: Consumers see the current situation as OK, but they’re worried about the future.

In other dealings early Wednesday, Bitcoin was trading at $88,800.

Treasury yields pulled back as investors herded into investments generally seen as safer in times of uncertainty. Yields have been swinging since President Donald Trump’s election amid worries over how his policies on tariffs, immigration and taxes could affect the global economy.

Trump has antagonized U.S. trading partners recently, threatening to raise tariffs and inviting them to retaliate with import taxes of their own. Trump said Monday that tariff hikes on imports from Canada and Mexico will move ahead after a one-month delay.

U.S. benchmark crude oil gained 18 cents to $69.11 per barrel. Brent crude, the international standard, dropped $1.37 to $72.68 per barrel.

The dollar rose to 149.60 Japanese yen from 149.03 yen. The euro slipped to $1.0494 from $1.0515.