Investor sentiment regarding the U.S. economy has taken a decisively optimistic turn, as the probability of a 2025 recession plummets on prediction markets. On the crypto-based platform Polymarket, odds for a U.S. recession have fallen to just 22%, marking the lowest point since late February. This represents a significant reversal from earlier in the year when fears intensified. The anxiety was initially stoked by the Atlanta Federal Reserve’s GDPNow indicator, which at one point forecasted a 1.5% economic contraction for the first quarter. While the actual decline was a milder 0.5%, the market remained on edge. Tensions escalated dramatically in March following President Donald Trump's announcement of sweeping reciprocal tariffs, ominously branded “Liberation Day,” which rattled investors. This, combined with the Federal Reserve's decision to slow the pace of its balance sheet reduction, pushed Polymarket recession odds as high as 66% in April, a sentiment echoed by Wall Street firms like Goldman Sachs, which placed the probability at 45% at the time.

Crypto Markets Rally as Trade War Fears Subside

The recent shift in sentiment is largely attributed to easing trade tensions, a development that has sent a wave of relief across risk asset markets, including cryptocurrency. Major digital assets posted notable gains Sunday morning following comments from U.S. Treasury Secretary Scott Bessent, who hinted at imminent trade deals. According to a Reuters report on his CNN interview, Bessent indicated that several agreements are close to being finalized ahead of a critical July 9 deadline. This date marks the end of a temporary pause on higher tariffs that were first announced on April 2. Bessent warned that countries failing to finalize deals would see tariffs “boomerang back” to their higher April levels starting August 1. This rhetoric appears to be catalyzing negotiations and has bolstered a market theory known as the “TACO” (Trump Always Chicken Out) trade, where investors bet on initial tariff threats being walked back. The easing financial conditions have prompted firms like Goldman Sachs to slash their 12-month recession odds to 30%, reflecting renewed confidence in the economic outlook.

Bitcoin (BTC) Price Analysis: Eyeing Resistance at $110,000

This macroeconomic optimism has provided significant tailwinds for Bitcoin (BTC). The leading cryptocurrency briefly surpassed $109,000 over the weekend, reacting positively to the trade news. Current data shows the BTCUSDT pair trading around $108,233.19 after hitting a 24-hour high of $109,656.72. This price action establishes the zone between $109,500 and the psychological $110,000 mark as a key immediate resistance level. A decisive break above this ceiling, supported by high trading volume, could signal a continuation of the bullish trend. On the downside, the 24-hour low of $108,066.95 serves as the initial support. A failure to hold this level could see prices retrace towards the $105,000 range. The current rally is a stark contrast to the market reaction following the initial “Liberation Day” tariff announcement on April 2, which triggered a sharp sell-off that pushed BTC down to $75,000. The recovery to over $100,000 demonstrates the market's sensitivity to geopolitical and macroeconomic developments, particularly those affecting U.S. economic stability.

Altcoin Market Performance: SOL, XRP, and AVAX Show Strength

The positive sentiment has spilled over into the altcoin market, with several major tokens showing impressive gains. Ethereum (ETH) has climbed to approximately $2,559.92 against USDT, with its 24-hour high reaching $2,603.59. The ETHBTC pair is trading at 0.02345, indicating that while ETH is gaining in USD terms, its performance against Bitcoin is relatively stable. Other standouts include XRP, which is trading around $2.28, and Solana (SOL), hovering near $151.32. The SOLBTC pair, up over 1% to 0.00140820, suggests Solana is gaining some ground on Bitcoin. However, one of the strongest performers in the short term has been Avalanche (AVAX). The AVAXBTC pair has surged by an impressive 6.73% to 0.00022670, signaling significant outperformance and strong buying interest. This divergence highlights a key opportunity for traders: identifying altcoins with strong relative strength against Bitcoin during broader market uptrends can often yield superior returns. As the July 9 deadline approaches, traders should monitor these key altcoin pairs for signs of continued strength or potential reversals tied to the macro narrative.