The stock and crypto markets experienced a significant sell-off on Monday, with Bitcoin (BTC) dropping to $75,000 and Ethereum (ETH) testing support at $1,500 for the first time since 2023. Ripple (XRP) also plunged below a crucial level. The market fear spread globally, prompting analysts to assess the impact of a new Goldman Sachs recession call on these prices.
Goldman Sachs analysts increased their recession probability from 35% to 45%, attributing it to the ongoing trade war between the US and the rest of the world. They anticipate a 0.5% economic growth rate in the US, down from their previous estimate of 1%, due to tariffs and policy uncertainty. Despite the bearish outlook on the US economy, the analysts believe that rate cuts by the Fed could benefit risky assets like stocks and cryptocurrencies.
Bitcoin’s price has dropped from highs of $109,300 to a low of $74,730, nearing the critical support level at $76,823. The analysts predict a bearish trend for BTC, with a potential drop to $70,000. However, a rebound could occur if the coin retests the support at $73,827, signaling a break-and-retest pattern common in price movements.
Ethereum’s price has also declined significantly, falling below key support levels like $1,500 and $2,120. The triple-top chart pattern suggests a potential drop to $1,200 before a rebound, especially when the Fed initiates rate cuts. Similarly, Ripple’s price is at risk of further decline after falling below key levels like $1.9213 and $2. The head and shoulders chart pattern indicates a target price of $0.9342.
Historically, markets tend to rebound following periods of extreme volatility and downturns. The dot-com bubble, Global Financial Crisis, and the COVID-19 pandemic are examples of such scenarios. As the Fed is expected to cut rates, cryptocurrencies like Bitcoin, Ethereum, and Ripple could experience substantial gains over time, albeit with high volatility in the short term.
