Bitwise analysts warn that Bitcoin's price is priced in for recession, but further downside risks remain - IcoHolder.

Bitcoin has already absorbed much of the recession concerns that have been looming over the U.S. economy, but risks of further downside remain, according to analysts at Bitwise. While the cryptocurrency and other altcoins have likely priced in much of the current recession fears, a deeper economic downturn could still push prices lower.

In a recent research report, Bitwise experts examined Bitcoin’s performance during previous recessions, noting that while Bitcoin endured a significant 50% drop during the 2020 Covid recession, it ultimately rebounded with a 300% gain by the end of the year. This historical performance offers insight into Bitcoin’s potential trajectory during uncertain economic times, but it also highlights the volatility that can accompany such periods.

The analysts suggest that despite Bitcoin’s 27% decline from its recent peak, most recession concerns may already be factored into its price. However, they caution that if the U.S. economy does enter a full-scale recession, additional downside risks could emerge.

As U.S. economic policy uncertainty reaches levels not seen since the Covid crisis, the situation is ripe for further volatility. Google search trends show that interest in the word "recession" is on par with what was observed during the early pandemic, reflecting widespread concern.

Compounding these worries is the political landscape, with markets now turning their attention to former President Donald Trump’s upcoming "Liberation Day" announcement, which is expected to introduce new tariffs. With consumer confidence at a 12-year low and equity markets already under pressure, these developments could deepen recession fears, impacting risk assets, including Bitcoin.

Despite the uncertainty, Bitwise analysts emphasize that much of the current downturn is already priced into Bitcoin. However, further economic instability could still add pressure, potentially leading to more downside for the cryptocurrency in the short term.