Bitcoin price encounters a significant weekend challenge as US economic growth declines to 0.7% amid persistent inflation.

On Mar. 13, the US economy released a set of data that was perceived as ranging from unsettling to alarming.

The GDP for the fourth quarter of 2025 was adjusted downward to 0.7% from an initial estimate of 1.4%, following a growth rate of 4.4% in the third quarter.

Core PCE for January increased by 3.1% year over year, with a monthly rise of 0.4%. Durable-goods orders for January remained nearly unchanged, while core capital goods orders were flat, accompanied by a 0.1% decline in shipments. Real consumer spending saw a slight increase of just 0.1%.

These figures were delayed due to last year’s 43-day shutdown and were released after the onset of the US-Israeli conflict with Iran on Feb. 28. Oil prices surged to $119.50 this week before settling back to around $100. Since the conflict began, US gasoline prices have risen by 20% to $3.58 per gallon.

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The Federal Reserve is scheduled to meet on Mar. 17-18, and futures markets have reduced anticipated rate cuts for 2026 to approximately a quarter-point adjustment by December, down from two prior to the conflict.

In the meantime, Bitcoin has begun to show initial signs of stabilization. Since Mar. 11, ETF inflows have returned, spot demand has started to recover, funding has turned negative, and options volatility has decreased.

As of press time, BTC is trading around $70,600 after reaching an intraday high of $74,000 on Mar. 13. According to data from Farside Investors, US spot Bitcoin ETFs recorded a net inflow of $583 million from Mar. 9 to Mar. 12, following an outflow of $348.9 million on Mar. 6.

However, the reality is that Bitcoin’s delicate rebound is facing the most challenging macroeconomic conditions for risk assets: slowing growth, persistent inflation, and a Federal Reserve with limited options.

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The economy was already softening

The GDP revision reveals a more complex narrative than the headline figure indicates.

The downward revision was influenced by weaker exports, consumer spending, government expenditure, and investment.

Real final sales to private domestic purchasers, a more accurate measure of underlying domestic demand, decreased to 1.9% from an initial estimate of 2.4% and from 2.9% in the third quarter.

This indicates that the economy entered the Iranian oil shock on a more unstable foundation than the original fourth quarter report suggested. Nominal consumer spending increased by 0.4% in January, but real spending showed minimal change.

Indicator	Latest reading	Prior / comparison	Why it matters
Q4 2025 GDP	0.7%	1.4% initial estimate / 4.4% in Q3	Growth slowed sharply
Real final sales to private domestic purchasers	1.9%	2.4% initial / 2.9% in Q3	Cleaner read on domestic demand
Core PCE inflation	3.1% YoY	Fed target: 2.0%	Underlying inflation still sticky
Real consumer spending	0.1% MoM	Nominal spending: 0.4%	Consumers are spending, but barely in real terms
Core capital goods orders	Flat	Shipments: -0.1%	Business investment lost momentum

Demand for business equipment has weakened, with core capital goods orders remaining flat and shipments declining.

The inflation aspect adds further pressure. The January headline PCE was reported at 2.8% year over year, while core PCE increased to 3.1%, reflecting a 0.4% monthly rise.

This positions the Fed’s closely monitored inflation measure significantly above the 2% target. The central bank’s current target range remains at 3.50% to 3.75%, unchanged since January.

The urgency of the situation is heightened by the fact that all these figures were recorded prior to the energy shock.

The February CPI and the delayed January PCE data were collected before the strikes at the end of February, while the oil price spike driven by the conflict occurred afterward.

The retrospective data already appeared concerning before the energy shock fully materialized.

Economists are now cautioning that rising energy costs could exacerbate the trade-off between growth and inflation.

Goldman Sachs indicated that a temporary rise to $100 oil could reduce global growth by 0.4% and increase global headline inflation by 0.7% in its optimistic scenario.

Reuters reported that economists anticipate March consumer prices could rise by as much as 1%.

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Bitcoin's fragile internals face a real test

The Federal Reserve is set to meet on Mar. 17-18, and markets largely expect the central bank to maintain current rates.

The more significant test will be what Fed Chair Jerome Powell communicates regarding the macroeconomic challenges.

Expectations for rate cuts have already been postponed due to the conflict, complicating the inflation outlook.

The traditional unfavorable scenario is now presented to the Fed: slowing growth, persistent prices, and an energy shock that could exacerbate both issues. If Powell emphasizes inflation patience over concerns about slowing growth, risk assets may encounter a more challenging environment.

If he acknowledges increased uncertainty related to energy while maintaining a cautious stance, the market may remain in a holding pattern.

The challenge for Bitcoin is that neither scenario provides substantial support. A hawkish hold reinforces the notion of “higher for longer” rates while signaling slower growth. A dovish-but-cautious hold maintains the macro overhang without offering relief.

Bitcoin currently exhibits stronger near-term internals than the macro backdrop suggests, making the upcoming weeks particularly noteworthy. ETF flows have turned positive again after a brief period of outflows.

Funding has shifted to negative rather than euphoric, which alleviates some excess from the market.

Options volatility has decreased, and Glassnode has observed increasing upside interest around $75,000, alongside a primary demand zone between $60,000 and $69,000.

The market is stabilizing, although Glassnode characterized the conditions as fragile, with spot demand beginning to recover rather than having fully recovered. The critical question is whether this stabilization can endure while the Fed and oil backdrop worsen.

Scenario	Macro trigger	Fed tone	Likely BTC implication
Bull	Oil retreats from spike	Shock treated as temporary	BTC can retest $75,000
Base / holding pattern	Oil stays elevated but stable	Cautious hold, uncertainty emphasized	BTC stays range-bound
Bear	Oil near $100, inflation fears harden	“Higher for longer” reinforced	BTC vulnerable to $60,000–$69,000 demand zone
Black swan	Prolonged Hormuz disruption	Policy trap narrative	BTC trades like a stressed risk asset

If oil continues to retreat from this week’s spike and the Fed regards the energy shock as serious but temporary, Bitcoin’s next significant test will be the $75,000 level.

Goldman still anticipates Brent to drift back toward the low $70s later this year in its central view. Ongoing ETF inflows would support a higher move.

If oil remains around $100 and inflation fears intensify, Bitcoin may face vulnerability to a retest of the $60,000 to $69,000 demand zone.

The market would be pricing in “higher for longer” rates and slower growth simultaneously, which presents a challenging combination for any risk asset.

The black swan scenario involves a prolonged disruption in Hormuz that shifts the narrative from a “temporary energy hit” to a “policy trap.” In such a case, Bitcoin would behave like a stressed risk asset.

Why does this extend beyond crypto

This represents the classic unfavorable scenario for anyone with stocks, retirement accounts, mortgages, or exposure to risk assets.

For mainstream investors	For crypto investors
Slower growth threatens stocks and earnings expectations	Bitcoin is being tested by worsening macro, not just crypto-specific sentiment
Sticky inflation keeps pressure on borrowing costs and mortgages	“Higher for longer” rates are a tough backdrop for fragile rebounds
Higher gasoline and energy costs hit households directly	ETF inflows and better internals help, but may not offset macro stress
The Fed has less room to cushion a slowdown	BTC must prove stabilization can survive a macro shock

The economy appeared weaker than reported even before the oil shock, and now the Fed has limited capacity to assist if growth declines further.

For crypto holders, it is crucial to observe Bitcoin’s ability to maintain stability while ETF demand improves, despite the deteriorating Fed and oil backdrop.

The market is not entering this evaluation in a state of full-blown mania, which is actually a more favorable setup. Funding is negative, volatility has decreased, and flows have stabilized.

The challenge lies in the fact that macro conditions are deteriorating more rapidly than Bitcoin’s internal recovery is progressing. The economy was already losing momentum prior to the arrival of the oil shock.

Business investment began the first quarter on a weak note. Real consumer spending showed minimal growth. Core inflation remains persistent, and gasoline prices are rising in real time.

The Fed will convene next week, and Powell will need to navigate a declining growth-inflation mix with limited tools. Markets have already reduced expectations for rate cuts.

If the energy shock continues, the policy choices will become increasingly difficult.

Bitcoin’s stabilization is genuine, but it is being tested by the most unfavorable macro environment for a fragile rebound.

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