Analysts Predict Bitcoin Decline Amid Negative US Manufacturing Data

Analysts predict Bitcoin’s price may decline due to adverse US manufacturing data from the Federal Reserve. The Philadelphia Federal Reserve Manufacturing Index reported significant drops in activity, citing rising costs from potential tariffs proposed by President Trump. Although rising prices complicate market dynamics, Bitcoin has shown resilience compared to stocks, maintaining stability amid economic concerns.

Recent reports from the US Federal Reserve have propelled analysts to predict a potential decline in Bitcoin’s spot price. The Philadelphia Federal Reserve Manufacturing Index, as noted on April 17, highlighted significant declines in business activity among 250 US manufacturers, representing the steepest drop since 2020. This downturn places Bitcoin (BTC) under short-term pressure, according to researchers at Bitunix, who indicated that a price retention above $83,000 could enable a robust recovery.

As of April 18, Bitcoin was trading near $84,000 per coin. The Fed’s discouraging data coincides with US President Donald Trump’s proposed tariffs on imports, which are expected to elevate production costs for manufacturers. The report indicated that general activity, new orders, and shipments all experienced declines, hinting at gloomy growth expectations over the coming six months.

Analysts caution that the dual forces of rising prices and declining production could adversely affect financial markets, including cryptocurrencies. A Blockworks macroeconomic analyst, Felix Jauvin, articulated concerns about economic activity plummeting while prices simultaneously increase, creating an adverse situation for policymakers, particularly amid uncertainty regarding the durability of tariffs.

Despite these pressures, Bitcoin has shown strength against recent macroeconomic disturbances, outpacing stocks and other cryptocurrencies according to Binance’s findings. Since the announcement of tariffs on April 2, Bitcoin’s price has remained relatively stable, only briefly declining over 10%. In contrast, the S&P 500 index has recorded a drop of about 7%.

Even following tariff announcements, Bitcoin has exhibited resilience, often maintaining stability or recovering during periods when traditional risk assets falter. Trump’s original proposal aimed at imposing significant tariffs on foreign goods, but he later postponed these plans for some countries, although high taxes on Chinese imports remain, raising concerns amongst crypto stakeholders about the risks posed by a potential trade war to blockchain networks.