On March 13, the U.S. economy provided a trove of data that was between unpleasant and alarming.
GDP for the fourth quarter of 2025 has been revised downward from the initial forecast of 1.4% to 0.7%, following a 4.4% growth in the third quarter.
Core PCE in January increased by 3.1% compared to the same month last year and by 0.4% compared to the previous month. Durable goods orders were almost flat in January, while core capital goods orders were flat, with shipments down 0.1%. Real personal consumption expenditure increased by only 0.1%.
These numbers were delayed by last year’s 43-day government shutdown and came to market after the US-Israel war against Iran began on February 28th. Oil prices soared to $119.50 this week before falling to nearly $100. Gasoline prices in the United States have increased 20% since the war began, to $3.58 per gallon.
The Fed met March 17-18, and futures markets narrowed expectations for a 2026 rate cut to about a quarter of a point by December, down from two cuts before the dispute.
Bitcoin, on the other hand, is showing early signs of stabilization. Since March 11th, ETF inflows have returned and there is also spot demand. Recovery begins, funding turns negative, options volatility declines eased.
At the end of the week, BTC is trading around $70,600 at the time of writing, after reaching $74,000 intraday on March 13th. The US Spot Bitcoin ETF saw net inflows of $583 million from March 9 to March 12, after an outflow of $348.9 million on March 6, according to data from Pharcyde Investors.
But in reality, Bitcoin’s fragile rebound is running headlong into the worst possible macro mix for a risk asset: slowing growth, persistent inflation, and fewer clean options from the Federal Reserve.
The economy was already softening
Revised GDP numbers tell a deeper story than the headline numbers suggest.
The downward revision was due to weaker exports, personal consumption, government spending, and investment.
Real final sales to domestic private buyers, a clearer indicator of the fundamentals of domestic demand, slowed to 1.9% from the 2.4% initially expected and 2.9% in the third quarter.
This means the economy entered the Iranian oil shock in a more volatile situation than the initial fourth quarter announcements had suggested. Nominal personal consumption spending increased by 0.4% in January, but real spending was little changed.
| indicator | latest reading | Previous/Compare | why is it important |
|---|---|---|---|
| GDP in Q4 2025 | 0.7% | Initial forecast 1.4% / 3rd quarter 4.4% | growth slows sharply |
| Actual final sale to domestic individual purchaser | 1.9% | First time 2.4% / Third quarter 2.9% | Cleaner reading on domestic demand |
| Core PCE inflation rate | 3.1% compared to previous year | Fed target: 2.0% | Underlying inflation remains persistent |
| real consumption expenditure | 0.1% previous month | Nominal expenditure: 0.4% | Consumers are spending, but in real terms they are spending little. |
| Core capital goods orders | flat | Shipments: -0.1% | Business investment momentum is lost |
Demand for business equipment lost momentum, orders for core capital goods were flat, and shipments declined.
The inflation side adds pressure. Headline PCE in January was 2.8% year over year, while core PCE rose to 3.1%, a 0.4% increase on a monthly basis.
This means that the Fed’s most closely watched inflation indicator is well above its 2% target. The central bank’s current target range is 3.50-3.75%, unchanged from January.
What makes this all the more urgent is that these numbers all predate the energy shock.
The February CPI and delayed January PCE period were announced before the strike at the end of February, but the war-induced oil price hike occurred afterwards.
Before the energy shock was fully transmitted, the forward-looking data already looked unpleasant.
Economists are now warning that rising energy costs could worsen the trade-off between growth and inflation.
Goldman Sachs said that in an upside scenario, a temporary rise in oil to $100 could reduce global growth by 0.4% and push up global headline inflation by 0.7%.
According to Reuters, economists believe consumer prices could rise by up to 1% in March.
Bitcoin’s fragile internals are facing a real test
The Federal Reserve will meet on March 17-18, and markets widely expect the central bank to keep interest rates on hold.
The bigger test will be what Fed Chairman Jerome Powell says about macro cross-currents.
Amid the war, expectations for rate cuts have already waned, complicating the outlook for inflation.
A classic bad menu now looms before the Fed: slow growth, persistently high prices, and an energy shock that could make both worse. If Chairman Powell prioritizes inflation resilience over concerns about downside growth, risk assets will face a tougher environment.
If he maintains a cautious tone while acknowledging increased energy-related uncertainty, the market will remain in a holding pattern.
The problem with Bitcoin is that neither path offers much support. Maintaining a hawkish stance reinforces the idea that interest rates will remain high for an extended period of time, and at the same time signals a slowdown in growth. A dovish but prudent hold policy maintains the macro overhang without providing relief.
Bitcoin has better short-term internals than its macro background, which should make the coming weeks more interesting. ETF flows have turned positive again after a short period of outflows.
Funding turned negative instead of euphoric, and some of the bubbles disappeared from the market.
Options volatility has eased, with Glassnode noting that in addition to the main demand zone of $60,000 to $69,000, upside is increasing around $75,000.
Although the market is stabilizing, Glassnode said the situation is fragile, with spot demand starting to recover rather than fully recovering. The question is whether that stability can be maintained even as the Fed and oil situation worsens.
| scenario | macro trigger | federal tone | Probably the influence of BTC |
|---|---|---|---|
| bull | Crude oil retreats from spike | Shock is treated as temporary | BTC can be retested $75,000 |
| base holding pattern | Oil remains elevated but stable | Cautious reservations, emphasis on uncertainty | BTC remains range bound |
| bear | Oil prices approach $100, raising concerns about inflation | Strengthen “higher and longer” | BTC is susceptible to: $60,000 – $69,000 demand zone |
| black swan | Prolonged turmoil in Hormuz | A story of policy traps | BTC trades like a stressed risk asset |
If oil prices continue to retreat from this week’s surge and the Fed treats the energy shock as severe but temporary, Bitcoin’s next clean test will be in the $75,000 area.
Goldman still centrally expects Brent to return to the low $70s later this year. If ETF inflows continue, it will support the rally.
If oil prices remain near $100 and inflation concerns increase, Bitcoin will be vulnerable to a retest of the $60,000 to $69,000 demand zone.
Markets are pricing in higher-for-the-longer interest rates and slower growth at the same time, a difficult combination for any risky asset.
The black swan scenario is a prolonged disruption of the Hormuz conflict, shifting the narrative from a “temporary energy blow” to a “policy trap.” In that case, Bitcoin acts as a stressed risk asset.
Why this extends beyond cryptocurrencies
This is a classic bad menu for anyone exposed to stocks, retirement accounts, mortgages, or risky assets.
| For mainstream investors | For crypto investors |
|---|---|
| Slowing growth threatens stock prices and profit expectations | Bitcoin is being tested not only by crypto-specific sentiment but also by deteriorating macro conditions |
| Persistent inflation continues to put pressure on borrowing costs and mortgages | “Long-term high interest rates” are the harsh backdrop for a fragile rebound |
| Rising gasoline and utility costs hit household budgets directly | ETF inflows and internal improvements will help, but may not offset macro stress |
| The Fed has little room to cushion the economic slowdown | BTC needs to prove that stabilization can withstand macroshocks |
Even before the oil crisis, the economy looked softer than advertised, but the Fed now has less room to help if growth worsens.
Of note for crypto holders is that Bitcoin is being asked to prove that it can sustain itself while ETF demand improves while the Fed and oil backdrop worsens.
The market isn’t coming into this test in full-blown geek mode, and that’s actually the more powerful setup. Funding is negative, volatility has eased and flows are stable.
The challenge is that the macro environment is deteriorating faster than Bitcoin’s internal repair progresses. The economy was already losing momentum before the oil crisis occurred.
Capital investment got off to a slow start in the first quarter. Personal consumption barely increased in real terms. Core inflation is persistent and gas prices are rising in real time.
The Fed meets next week, and Powell will need to navigate a worsening mix of growth and inflation with limited tools. The market has already dialed back expectations for a rate cut.
If the energy shock persists, policy choices will become even more difficult.
Bitcoin stabilization is real, but the worst possible macro environment is testing Bitcoin’s fragile rebound.
(Tag translation) Bitcoin
