The US macroeconomic outlook is once again stifling crypto’s bullish momentum.
Wednesday morning’s economic data showed that preliminary US Q1 2025 GDP contracted by 0.3%, defying market expectations of a 0.3% expansion. This marks the lowest and first negative GDP reading since Q2 2022.
To make matters worse, Q1 Personal Consumption Expenditures (PCE) rose 1.8% versus expectations of 1.2%, while core PCE surged to 3.5%, well above forecasts.
Weak growth and elevated inflation have sparked stagflation fears, sending both equities and crypto lower. Meanwhile, prediction markets Kalshi and Polymarket are pricing in high recession odds for 2025 — at 74% and 70%, respectively.
The Bitcoin price fell to $93,000 — dangerously below the $93,500 support ahead of today’s monthly close. However, it has since bounced back up to $94k.
Despite the weakness in altcoins, experts are asking sidelined investors to buy the dip, citing the soaring global liquidity.
Why Sidelined Investors Should Buy The Dip?
Wednesday morning’s US GDP data has sparked recession fears in the US economy — another negative GDP print in the second quarter would meet the criteria of a technical recession.
Odds of a recession in 2025 have surged to 74% on Kalshi and 70% on Polymarket.
However, smart money investors aren’t panicking. The Head Macro Economist at Swissblock, Henrik Zeberg, claims that crypto and equities are still due for a “blow-off top” rally.
He highlights that the US GDP data has been negatively impacted by heavy imports from US companies in preparation for Trump’s tariffs and doesn’t accurately represent the nation’s growth trajectory.
Moreover, the threat of weakening growth could prompt a dovish pivot from the US Federal Reserve, which would be dovish for risk assets in the long run. The CME FedWatch, which represents the sentiment of interest rate traders, is already pricing in four rate cuts in 2025.
While it is unlikely that the Fed cuts its benchmark rate in next week’s FOMC meeting, Chair Jerome Powell could adopt a dovish tone to pacify the market.
Smart money investors aren’t overreacting to Wednesday’s inflation data as well. While the Q1 PCE data did miss the mark, March’s core PCE came out at 2.6%, in line with market expectations.
Meanwhile, Truflation still suggests that the real US inflation is well below the Fed’s 2% target, with the current reading showing 1.57%.
Instead of overreacting to short-term fluctuations, crypto investors should zoom out. Global liquidity — as measured by the Global M2 money supply — is currently at its all-time high and is trending upwards. Check out macroeconomist Raoul Pal’s Global M2 chart below.
Historically, this indicator has shown an extremely strong correlation with Bitcoin’s price trajectory. If the trend continues, BTC is headed to $140k, which would likely pave the way for new all-time highs in altcoins.
Best Cryptos To Buy Now
Bitcoin remains an attractive investment, especially if its correlation with the Global M2 continues.
However, investors should also pay attention to the top-performing altcoins. For instance, Fartcoin is back to defying the broader market uncertainty. Currently trading at $1.14, it is poised for another test of the $1.20 resistance. A breakout above could pave the way for a rally to $2.
Today’s crypto market crash is another opportunity for sidelined investors to buy high-upside altcoins like Sui, Virtuals Protocol, Bittensor and Dogwifhat. However, they should manage for the possibility of some more downside in the coming days.
Presale assets are also in high demand, considering they are available at a fixed price and aren’t impacted by the broader market outlook.
For instance, MIND of Pepe (MIND) is seeing a flurry of whale buys ahead of its AI agent launch on May 10th.
While the AI agent market is saturated on Solana, it has tremendous potential in the Ethereum ecosystem. The MIND presale has already raised over $8.5 million in short order.
Considering the strong demand for AI coins, several analysts are calling it the next 100x crypto.
Visit MIND of Pepe Presale
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