The cryptocurrency market is under selling pressure due to macroeconomic uncertainties and sharp declines in technology shares. A 7% retreat on Nasdaq and investors’ tendency to avoid risks are increasing volatility in Bitcoin and other digital assets.

Quinn Thompson, founder of hedge fund Lekker Capital, warns that inflation data is keeping the Fed away from interest rate cuts, advising caution with risky assets. However, Thompson forecasts that Bitcoin could reach $70,000 by the end of March.

The recent selling wave in the cryptocurrency market, combined with macroeconomic uncertainties, is deepening. Sharp declines in Nasdaq and reduced risk appetite are also negatively affecting digital assets. Hedge fund Lekker Capital’s founder Quinn Thompson notes that hot inflation data and instability in inflation expectations are posing a strong threat to risky assets.

NASDAQ’S SHARP DROP HITS CRYPTO TOO

One of the significant factors that stand out causing selling pressure in the cryptocurrency market is the burst of the speculative balloon in the memecoin market in January. However, the recent sharp decline in the markets has deepened by merging with a broader trend of risk aversion. In recent days, the Nasdaq index lost about 7%.

This sharp pullback in technology shares was particularly evident among chip manufacturers. Nvidia (NVDA) led the sector-wide decline by losing 5% after its fourth-quarter financial report. Investors are exiting major technology companies with high valuations in this process, reducing risk appetite for cryptocurrencies.

President Donald Trump’s announcement of new tariffs on Mexico, Canada, and China is also heightening the current uncertainty in the markets. Trump’s trade policies are causing new pressures on the global economy, forcing investors to be prepared for more volatility in the markets.

HEDGE FUNDS WARN: ”BE CAUTIOUS WITH RISKY ASSETS”

Hedge funds warn: “Be cautious with risky assets”

Quinn Thompson, founder of Lekker Capital, stressed that current inflation data and long-term inflation expectations are putting pressure on risky assets. He said, “Inflation still looks too hot for the Fed to cut interest rates in the near term. 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 emphasized the need for investors to remember that bull markets will not last forever, pointing out that even positive news flow on Bitcoin prices does not lead to a significant increase. However, he mentioned that he expects Bitcoin to reach $70,000 by the end of March.

With macroeconomic uncertainties and the continuing trend of risk aversion in the markets, it is predicted that cryptocurrencies may struggle to find direction in the short term. Hedge funds are urging investors to be more careful in risk management, indicating that the upcoming weeks will be critical for the crypto markets.