3 Reasons Why the Market Could Extend Its Downtrend

The crypto market has not been doing well over the past few days, with Bitcoin still struggling to break through the important $90,000 mark, currently stuck around $83,000, Ethereum still not doing any better as it fell below $1,900, most other altcoins are still in the red.

Matt Bartolini, director of SPDR Americas Research at State Street Global Advisors, recently spoke about the risks facing the cryptocurrency market,  especially in the current global economic climate.

Here are three key reasons that he believes could prolong the market's downtrend.

Weakening consumer confidence : Consumer confidence fell to its lowest level since 2021, hitting 92.9 in March. This suggests Americans are feeling uncertain about the economy, and if spending slows, it could hurt markets, especially in the consumer sector. Consumer discretionary stocks in the S&P 500 are down 9% this year, compared to a 2% decline for the broader market.

Consumer Discretionary Bears : There are signs of a bearish outlook in the consumer discretionary sector, with $800 million in outflows in March alone. Options data also shows more shorts than longs and rising short interest. Much of this bearish sentiment stems from the poor performance of stocks like Tesla and broader economic factors.

Uncertainty in economic data  : Concerns about inflation and weak economic data, such as the Atlanta Federal Reserve’s GDP forecast, are also weighing on market sentiment. While some sectors, such as health care and insurance, are outperforming, overall economic challenges and the impact  of tariffs  are making investors more cautious. However, banks are benefiting from widening interest rate spreads and have seen positive inflows.