Bitcoin and most altcoins crashed on Friday, erasing some of the gains

Bitcoin and most altcoins crashed on Friday, erasing some of the gains that had been made in the past two weeks. Cardano (ADA) price crashed to a low of $0.69

Bitcoin and major altcoins, including Cardano (ADA) and Pepe (PEPE), suffered significant crashes on Friday, erasing some of the gains that had been made in the past two weeks.

Cardano price crashed to a low of $0.69, while Pepe dropped to $0.00078. Some of the top laggards also included coins like Floki, Shiba Inu, and Curve DAO. After rising to $89,000 earlier this week, Bitcoin retreated below the $84,000 level.

US Inflation Rose As Consumer Spending Slowed

The crashes happened because of two main reasons. Firstly, the US published economic data that showed that inflation remained high, while spending cooled. The closely-watched core PCE price index rose from 2.7% in January to 2.8% in February. At the same time, personal spending rose by 0.4%, missing the expected increase of 0.5%. This trend may continue as a report released earlier this week showed that consumer confidence had recently tumbled.

These numbers also account for the significant decline in US stock indices. The Dow Jones index crashed by 800 points, while the S&P 500 and Nasdaq 100 indices tumbled by 135 and 480 points, respectively, as fear spread in the market.

Cardano (ADA), Pepe (PEPE), Floki (FLOKI), and Shiba Inu (SHIB) saw declines ahead of Trump’s Liberation Day

Bitcoin and altcoins like Cardano, Pepe, Floki, and Shiba Inu prices dropped as the market awaited Donald Trump’s Liberation Day on Tuesday. On this day, the US is set to impose reciprocal tariffs on imported goods from most countries, which could escalate a trade war and potentially push the global economy into a recession.

Earlier this week, Trump announced that the US would impose a 25% tariff on imported cars and parts the following week. A 25% price increase is substantial, and many consumers may delay their spending in response.

On a positive note, a recession may lead to a higher unemployment rate and low inflation through the concept known as the Philips Curve. This theory suggests that inflation falls when the jobless rate is rising.

In turn, this may prompt the Federal Reserve to begin cutting interest rates in the second half of the year. In a note, a Bloomberg analyst stated: “We anticipate that deteriorating consumer sentiment will negatively impact spending and growth moving forward. With the Fed on hold for now, they’ll likely need to cut rates in the second half of the year more quickly—and likely by more—than the latest dot plot shows they anticipate.”

Interest rate cuts by the Federal Reserve, quantitative easing, and potential government stimulus could have a positive impact on cryptocurrencies such as Cardano, Dogecoin, Shiba Inu, and Pepe coin.