The crypto market is under selling pressure due to macroeconomic uncertainties and sharp declines in technology stocks. The 7% pullback in Nasdaq and investors’ risk aversion tendency are increasing volatility in Bitcoin and other digital assets.

Quinn Thompson, founder of hedge fund Lekker Capital, warns that inflation data has steered the Fed away from interest rate cuts, emphasizing the need for caution in risky assets. However, Thompson predicts that Bitcoin could reach $70,000 by the end of March.

The recent selling wave in the crypto market is deepening, combined with macroeconomic uncertainties. Sharp declines in Nasdaq and decreased risk appetite are also adversely affecting digital assets. Quinn Thompson, founder of hedge fund Lekker Capital, mentions that hot inflation data and instability in inflation expectations pose a strong threat to risky assets.

NASDAQ’S SHARP DECLINE HITS CRYPTO TOO

The burst of the speculative meme coin market in January stands out as one of the key factors increasing selling pressure in the crypto market. However, the recent sharp declines in markets are deepening with a broader risk aversion tendency. In the last days, the Nasdaq index lost approximately 7%.

In this sharp pullback in technology stocks, chip manufacturers stood out, with Nvidia (NVDA) leading the sector-wide decline by losing 5% after its fourth-quarter financial report. Investors exiting large tech companies trading at high valuations have lowered the risk appetite for cryptocurrencies.

President Donald Trump’s announcement of new tariffs on Mexico, Canada, and China is further increasing current market uncertainties. Trump’s trade policies are causing new pressures in the global economy, leaving investors bracing for more volatility in the markets.

HEDGE FUNDS WARN: ”CAUTION IN RISKY ASSETS”

Hedge funds warn: “Caution in risky assets”

Quinn Thompson, founder of Lekker Capital, expressed that current inflation data and long-term inflation expectations are putting pressure on risky assets. He said, “Inflation still looks very hot for the Fed to cut interest rates in the short run. Long-term inflation expectations are moving upward, and the view that the U.S. economy is strong is turning into a ‘dead cat bounce’.”

Thompson stressed the need for investors to remember that bull markets do not last forever, pointing out that even positive news flow on Bitcoin prices has not significantly raised the price. Nevertheless, he mentioned expecting Bitcoin to reach $70,000 by the end of March.

If macroeconomic uncertainties and the ongoing risk aversion trend in the markets continue, it is predicted that cryptocurrencies may struggle to find direction in the short term. Hedge funds are urging investors to be more cautious in risk management while signifying that the upcoming weeks will be critical for the crypto markets.