According to The Kobeissi Letter, the ISM Services PMI new orders index fell sharply by 5.9 points in May, reaching 46.4, marking its second-lowest level since 2020 and its lowest since the 2008 Financial Crisis when excluding the pandemic period (source: @KobeissiLetter, June 5, 2025). This significant downturn in both manufacturing and services demand signals rising recessionary risks, which historically trigger increased volatility and risk-off sentiment in traditional financial markets. For the cryptocurrency market, such macroeconomic weakness often results in heightened short-term volatility, as investors rebalance portfolios and seek alternative assets. Traders should monitor risk sentiment closely, as deteriorating economic data may prompt shifts into digital assets or intensified selling pressure depending on liquidity and broader market reactions.

According to The Kobeissi Letter, the ISM Services PMI new orders index dropped by 5.9 points in May 2025 to 46.4, marking its second-lowest level since 2020 and, excluding 2020, the lowest since the 2008 Financial Crisis (source: The Kobeissi Letter, Twitter, June 5, 2025). This sharp deterioration in both manufacturing and services demand heightens concerns about a broader economic slowdown, directly impacting investor risk sentiment. Cryptocurrency markets tend to react strongly to such traditional economic stress signals, historically leading to increased volatility and potential liquidity outflows from risk assets as macroeconomic uncertainty escalates.

According to The Kobeissi Letter, the Philadelphia Fed Manufacturing Index plunged by 38.9 points in April to -26.4, marking its lowest reading since April 2023 and the second-lowest since 2020 (source: The Kobeissi Letter, Twitter, May 12, 2025). Additionally, new orders fell by 42.9 points to -34.2, the weakest since April 2020. This sharp contraction in US manufacturing signals increased economic uncertainty, which often leads to heightened volatility in both traditional equities and the cryptocurrency market as traders seek safe-haven assets and reassess risk exposure.

According to The Kobeissi Letter, the Philadelphia Fed Services index plummeted 19.4 points in March to -32.5, marking its lowest level since the 2020 pandemic. This significant drop indicates a decline in service sector activity, excluding 2020, it is the worst in 14 years. The new orders index also saw a steep decline of 18.2 points to -19.5, the lowest since April 2023, suggesting weakening demand. These indicators can influence market sentiment and trading strategies, particularly in sectors sensitive to economic activity fluctuations.