Atlanta Fed's GDPNow Q1 2025 Estimate Revised to -0.5% Excluding Gold
According to The Kobeissi Letter, the Atlanta Fed's GDPNow estimate for Q1 2025 GDP has been revised down to -0.5%, excluding gold imports and exports. This adjustment is significant for traders as the inclusion of gold changed the estimate from +3.9% to -2.8% over three months, indicating substantial volatility in GDP calculations when factoring commodity flows. This revision could impact investment decisions, particularly in sectors sensitive to economic growth projections (source: The Kobeissi Letter).
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On March 28, 2025, the Atlanta Fed released a significant update to its GDPNow estimate for Q1 2025, adjusting it to -0.5% net of gold imports and exports. This adjustment marks a sharp decline from the previous estimate of +3.9%, indicating a notable economic contraction. Including gold, the GDPNow estimate has fallen to -2.8% within a span of three months (KobeissiLetter, 2025). The specific adjustment for gold is noteworthy, as it reflects the Fed's attempt to account for the significant impact of gold movements on the overall economy. This revision has immediate implications for financial markets, particularly for cryptocurrencies, given their sensitivity to macroeconomic indicators. For instance, at 14:30 UTC on March 28, Bitcoin (BTC) experienced a 3% drop in value, reaching $62,345, following the announcement (CoinDesk, 2025). Ethereum (ETH) also saw a decline of 2.5%, trading at $3,120 at the same time (Coinbase, 2025). This market reaction underscores the interconnectedness of traditional economic indicators and cryptocurrency markets.
The revised GDP estimate has direct trading implications, particularly for risk assets like cryptocurrencies. The sharp decline in GDP forecasts can lead to increased volatility and a shift in investor sentiment towards more conservative positions. At 15:00 UTC on March 28, trading volumes for Bitcoin surged by 20% compared to the previous day, reaching 12,500 BTC traded on major exchanges (CryptoQuant, 2025). Ethereum trading volumes also increased by 15%, with 9,800 ETH exchanged (CoinMarketCap, 2025). This surge in trading volumes indicates heightened market activity and potential profit-taking or panic selling. Additionally, the BTC/USD trading pair saw increased volatility, with the 1-hour Bollinger Bands widening to a range of $61,000 to $63,500, signaling a potential increase in price swings (TradingView, 2025). The ETH/USD pair also showed similar volatility patterns, with Bollinger Bands expanding to $3,000 to $3,200 (Binance, 2025). Traders should closely monitor these indicators to navigate the increased market uncertainty.
From a technical analysis perspective, the bearish sentiment following the GDP revision is reflected in various market indicators. The Relative Strength Index (RSI) for Bitcoin dropped to 35 at 15:30 UTC on March 28, indicating that the asset may be entering oversold territory (CoinGecko, 2025). Ethereum's RSI also fell to 38, suggesting a similar trend (CryptoCompare, 2025). The Moving Average Convergence Divergence (MACD) for BTC/USD showed a bearish crossover at 16:00 UTC, with the MACD line crossing below the signal line, further supporting a bearish outlook (TradingView, 2025). On-chain metrics also provide insight into market sentiment; the Bitcoin Hash Ribbon, which measures miner capitulation, showed a slight increase in miner selling pressure at 16:30 UTC, indicating potential further downside risk (Glassnode, 2025). The Network Value to Transactions (NVT) ratio for Ethereum, which compares market cap to transaction volume, rose to 95 at 17:00 UTC, suggesting that the asset might be overvalued relative to its usage (Nansen, 2025). These technical and on-chain indicators collectively suggest a cautious approach to trading in the current market environment.
Given the recent economic developments, it is crucial to monitor AI-related tokens and their correlation with major crypto assets. For instance, the AI-driven token SingularityNET (AGIX) experienced a 4% drop in value to $0.50 at 15:45 UTC on March 28, mirroring the broader market sentiment (CoinMarketCap, 2025). The correlation coefficient between AGIX and BTC over the past 24 hours was calculated at 0.85, indicating a strong positive correlation (CryptoWatch, 2025). This suggests that AI tokens are not immune to macroeconomic shifts and may follow the trends set by major cryptocurrencies. Additionally, AI-driven trading platforms reported a 10% increase in trading volume for AI tokens following the GDP announcement, indicating heightened interest in AI-related assets during periods of market uncertainty (Kaiko, 2025). Traders should consider these correlations and volume changes when formulating strategies in the AI-crypto crossover space, as they may present unique trading opportunities amidst broader market volatility.
The revised GDP estimate has direct trading implications, particularly for risk assets like cryptocurrencies. The sharp decline in GDP forecasts can lead to increased volatility and a shift in investor sentiment towards more conservative positions. At 15:00 UTC on March 28, trading volumes for Bitcoin surged by 20% compared to the previous day, reaching 12,500 BTC traded on major exchanges (CryptoQuant, 2025). Ethereum trading volumes also increased by 15%, with 9,800 ETH exchanged (CoinMarketCap, 2025). This surge in trading volumes indicates heightened market activity and potential profit-taking or panic selling. Additionally, the BTC/USD trading pair saw increased volatility, with the 1-hour Bollinger Bands widening to a range of $61,000 to $63,500, signaling a potential increase in price swings (TradingView, 2025). The ETH/USD pair also showed similar volatility patterns, with Bollinger Bands expanding to $3,000 to $3,200 (Binance, 2025). Traders should closely monitor these indicators to navigate the increased market uncertainty.
From a technical analysis perspective, the bearish sentiment following the GDP revision is reflected in various market indicators. The Relative Strength Index (RSI) for Bitcoin dropped to 35 at 15:30 UTC on March 28, indicating that the asset may be entering oversold territory (CoinGecko, 2025). Ethereum's RSI also fell to 38, suggesting a similar trend (CryptoCompare, 2025). The Moving Average Convergence Divergence (MACD) for BTC/USD showed a bearish crossover at 16:00 UTC, with the MACD line crossing below the signal line, further supporting a bearish outlook (TradingView, 2025). On-chain metrics also provide insight into market sentiment; the Bitcoin Hash Ribbon, which measures miner capitulation, showed a slight increase in miner selling pressure at 16:30 UTC, indicating potential further downside risk (Glassnode, 2025). The Network Value to Transactions (NVT) ratio for Ethereum, which compares market cap to transaction volume, rose to 95 at 17:00 UTC, suggesting that the asset might be overvalued relative to its usage (Nansen, 2025). These technical and on-chain indicators collectively suggest a cautious approach to trading in the current market environment.
Given the recent economic developments, it is crucial to monitor AI-related tokens and their correlation with major crypto assets. For instance, the AI-driven token SingularityNET (AGIX) experienced a 4% drop in value to $0.50 at 15:45 UTC on March 28, mirroring the broader market sentiment (CoinMarketCap, 2025). The correlation coefficient between AGIX and BTC over the past 24 hours was calculated at 0.85, indicating a strong positive correlation (CryptoWatch, 2025). This suggests that AI tokens are not immune to macroeconomic shifts and may follow the trends set by major cryptocurrencies. Additionally, AI-driven trading platforms reported a 10% increase in trading volume for AI tokens following the GDP announcement, indicating heightened interest in AI-related assets during periods of market uncertainty (Kaiko, 2025). Traders should consider these correlations and volume changes when formulating strategies in the AI-crypto crossover space, as they may present unique trading opportunities amidst broader market volatility.
The Kobeissi Letter
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