Investor sentiment has shifted dramatically as the perceived risk of a U.S. recession in 2025 has plummeted. On the crypto-based prediction platform Polymarket, the odds of a recession have fallen to just 22%, marking the lowest point since late February. This optimism represents a significant turnaround from earlier this year when fears were stoked by the Atlanta Federal Reserve’s GDPNow indicator forecasting a potential contraction. Those concerns were amplified in March following President Donald Trump's announcement of reciprocal tariffs, which he dubbed “Liberation Day,” sending shivers through an already nervous market. By April, sentiment had soured to the point where major financial institutions like Goldman Sachs projected a 45% chance of recession, and Polymarket odds surged to a peak of 66%. Warnings from prominent figures, such as former U.S. Treasury Secretary Janet Yellen, who cautioned that the tariffs could have a “tremendously adverse” impact, further fueled the bearish outlook.

Crypto Markets Surge on Easing Trade Tensions and Positive Macro Data

In response to the easing macroeconomic headwinds, the cryptocurrency market experienced a broad-based rally. Bitcoin (BTC) led the charge, gaining over 1% and briefly surpassing the critical $109,000 level. According to recent market data, the BTCUSDT pair reached a 24-hour high of $109,656.72 before settling around $107,651.09, a 1.6% decline over the full 24-hour period. This price action suggests initial bullish momentum followed by some profit-taking. Other major cryptocurrencies joined the rally, with payment-focused token XRP and layer-1 blockchain Solana (SOL) each posting gains of over 2%, while the popular meme token Dogecoin (DOGE) jumped by 3%. Ethereum (ETH), the second-largest cryptocurrency, also saw positive movement, rising 1.5% to touch $2,550. The ETHUSDT pair recorded a 24-hour high of $2,588.41, though it later retraced to approximately $2,526.85.

Bessent's Commentary Sparks Risk-On Appetite

The primary catalyst for this risk-on sentiment appears to be comments from U.S. Treasury Secretary Scott Bessent, who hinted at the finalization of several trade deals ahead of the crucial July 9 Liberation Day tariff deadline. In an interview, Bessent stated that the administration is prepared to reimpose higher tariffs starting August 1 if trade partners do not accelerate negotiations. According to a Reuters report on his comments, this creates a strong incentive for deals to be completed swiftly. This development has quelled fears of a prolonged trade war, which had previously dragged down both traditional and digital asset markets. The initial tariff announcement on April 2 caused a significant market sell-off, with Bitcoin plunging to $75,000. The subsequent 90-day pause and recent progress have allowed for a recovery, fueling a narrative of “U.S. exceptionalism” that has propelled the S&P 500, Nasdaq, and Bitcoin to new heights, with BTC now trading firmly above the $100,000 mark.

Bitcoin and Altcoin Technical Analysis: Key Levels to Watch

From a trading perspective, several key levels are now in focus. For Bitcoin, the 24-hour high of $109,656 serves as immediate resistance. A sustained break above this level could open the door to further upside. Conversely, the 24-hour low of $107,500 provides initial support; a breach of this level could signal a deeper correction. While altcoins initially rallied, many have since pulled back. The SOLUSDT pair, after reaching a high of $153.43, fell back to $148.03, a 2.7% drop. Similarly, XRPUSDT hit a peak of $2.3517 before correcting to $2.25. Interestingly, the ETHBTC pair shows slight strength for Ethereum, trading up 0.17% at 0.02362, suggesting it is holding its ground relative to Bitcoin. However, one clear outperformer is Avalanche (AVAX), with the AVAXBTC pair surging an impressive 6.73% to 0.0002267, indicating strong buying interest and relative strength against the market leader.

Looking ahead, the market's direction will likely hinge on the outcome of trade negotiations leading up to the July 9 deadline. While Bessent's comments have injected a dose of optimism, the pullback from daily highs across the board indicates that traders remain cautious. The relatively low 24-hour trading volume on the BTCUSDT pair, at just under 8 BTC, suggests the initial upward move may lack strong conviction. A failure to secure the anticipated trade deals could quickly reverse the recent gains and reintroduce significant volatility. Traders should monitor macroeconomic news flow closely, as it remains the dominant driver of market sentiment for risk assets, including cryptocurrencies.