Bitcoin is creeping toward $97,000 as recession fears crank up — and macro traders now say a U.S. downturn isn’t just likely, it’s the default. That shift is putting the Federal Reserve in a pressure cooker, and crypto markets are licking their lips.
Recession Fear Becomes the New Base Case for Bitcoin
According to The Kobeissi Letter, the Fed is now facing its “worst nightmare”: a lose-lose scenario where cutting rates risks inflation, but keeping them high sinks GDP and jobs. Q1 GDP came in negative, missing expectations of +0.3%, while inflation — especially via tariffs — shows signs of sticking around.
“Effectively, the Fed must pick between containing either inflation or unemployment,” Kobeissi said. “A recession in the U.S. has become our base case scenario.”
Prediction market Kalshi agrees — odds of a full-blown recession have surged since the GDP release.
Rate Cut Pressure Builds
That has crypto watching the calendar. According to CME’s FedWatch Tool, markets are now pricing in a 63% chance of a rate cut at the Fed’s June 18 meeting — up from 57% just a day earlier. The May meeting? Only 3%.
“Push coming to shove in terms of economic data & rate cuts,” trader Skew posted. “The Fed will still be concerned about price pressures but more so about weakness within the economy.”
Risk-on Playbook Is Back – This Is Good for Bitcoin
For Bitcoin, that’s music to the ears. Looser monetary policy, more liquidity, and rising recession risk tend to drive risk-on trades — and crypto sits squarely in that camp.
“The rumours for a potential recession are increasing,” Michaël van de Poppe wrote, “which should strengthen the thesis for the Fed to loosen up. That will likely be a low on the markets, liquidity to be added, and risk-on to thrive.”
At the time of writing, Bitcoin is sitting at $96,059.
