💥Markets at a Crossroads: Shrinking GDP, Bullish BTC, and Trump’s Fed Power Play

📆 Week of June 23, 2025

🛰️Hey Nebulites,

Markets this week are doing what they do best: confusing everyone.

On one hand, Bitcoin printed a high-probability bullish pattern. On the other, U.S. GDP unexpectedly contracted and Trump might name a new Fed Chair early to push for rate cuts. Meanwhile, prediction markets are booming (Polymarket hit $1B), and crypto’s long-term case keeps getting stronger — even as volatility tests everyone’s patience.

Let's break it all down, Nebular style.

📬 This Week’s Lineup:

1. U.S. GDP Contracts in Q1 — What it means for markets and portfolios

2. Bitcoin’s Bullish Breakout Pattern — 78% success rate, strong macro backing

3. Trump Eyes Fed Shake-Up — Rate cut pressure + early nomination rumors

4. Polymarket Hits $1B Valuation — Betting markets go big despite regulation

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🎁 CHECK OUT OUR REFERRAL PROGRAM (Details at the end👇)

📉Chapter 1: U.S. GDP Contracts More Than Expected – What It Means for Crypto & Markets

The U.S. economy hit the brakes in Q1 2025.

The latest GDP report showed a 0.5% contraction, missing the already-low forecast of -0.2%. That’s not just a disappointing print — it’s a signal. One that shakes investor sentiment, rattles traditional markets, and sends macro warning bells echoing through the crypto space.

Let’s break it down.

What Just Happened?

GDP — the economy’s scoreboard — shrank last quarter.
That’s a reversal from the +2.4% growth in Q4 2024, and a sign that the U.S. may be flirting with stagflation-lite: slow growth, sticky inflation, and rising debt burdens.

Why the miss? Five culprits:

1. 🛍️ Slowing consumer spending (blame high interest rates + inflation)

2. 🏗️ Weak business investment

3. 🏛️ Lower government spending

4. 🌍 Net exports dragging GDP

5. 📦 Inventory cuts by businesses

The result: A broader economic slowdown that could force the Fed’s hand sooner than expected.

📉 Market Fallout: Stocks, Bonds, and Bitcoin

• 📊 Stocks: Earnings fears are growing. Defensive sectors like utilities may outperform cyclicals like tech.

• 💵 Bonds: Yields dropped as investors rushed into Treasurys.

• 🪙 Crypto: More complicated.

For Bitcoin & friends, it’s a macro balancing act:

🚨 Risk-off mode
Slower growth = less appetite for volatile assets → potential selling pressure.

💰 Inflation vs Deflation debate
If the contraction leads to deflationary fears, Bitcoin’s “inflation hedge” narrative weakens.
But if the Fed restarts the money printers? 🖨️ Expect renewed demand for scarce digital assets.

📉 Stronger USD?
Flight to safety could buoy the dollar, pressuring USD-denominated crypto prices.

🧠 But zoom out...
Long term, economic instability often drives interest in decentralized systems.
As trust in fiat erodes, Bitcoin’s appeal as a non-sovereign asset grows.

🚀 Chapter 2: BTC Breakout Imminent? 78% Success Pattern Meets Macro Tailwinds

Just as the U.S. economy begins to wobble (see: Q1 GDP miss), Bitcoin is flashing its own signal — and it’s a bullish one.

After closing Monday with a 4.34% daily gain, BTC printed a bullish engulfing candle, reversing two days of red. On its own, that’s interesting. But paired with macro uncertainty and falling rate expectations?

You’ve got a technical + narrative cocktail that could fuel the next leg up.

🔍 The Pattern: 78% Historical Success Rate

Cointelegraph did the homework for us:
Since 2021, this specific bullish engulfing pattern has appeared 19 times in a bull market context.
Result? 15 of those 19 occasions led to a new local high shortly after.

What counts as confirmation?

• Engulfs at least 2 prior red candles

• Appears after a corrective dip

• Followed by a break in structure (new higher high)

We're 2 for 2 on the first criteria. If BTC flips $108K into support, we're cooking.

Why It Matters Now

Normally, chart patterns are just one piece of the puzzle.
But in today’s macro climate, technicals that align with liquidity trends and rate narratives? That’s where conviction lives.

Let’s connect the dots:

• GDP contracted last quarter, surprising markets

• Rate cut probabilities just increased

• Liquidity is improving, and risk-on assets are responding

Enter Bitcoin.

💧 The Liquidity Comeback

According to Swissblock, BTC’s liquidity levels are back to where they were in December 2022 — right before the asset doubled.

Since bottoming at $16.8K in late 2022, Bitcoin has:

• Attracted $544B in fresh capital inflows

• Pushed realized market cap to a record $944B

Liquidity = fuel.
Bullish structure + macro loosening = spark.

🧠 Nebular Take

We’re not saying "green candles go brrr" is a thesis.
But when:

• Macro is wobbly (GDP down)

• Liquidity is flowing (BTC up)

• The Fed is cornered (rates potentially peaking)

…and then you get a textbook bullish pattern with 78% hit rate?

That’s signal. And it demands respect.

🧪 Chapter 3: Trump’s Fed Power Play — A Preemptive Strike on Powell?

It’s official: Trump’s back on his favorite pastime — bullying the Fed.

📢 Word on the street is that President Trump is weighing an early announcement for the next Chair of the Federal Reserve, even though Jerome Powell’s term doesn’t end until May 2026.

Unusual? Yes. Strategic? Extremely.
Because here’s the play: Trump wants to bend rate expectations his way now, not later — and potentially pressure markets into front-running his policy vision ahead of time.

🎯 The Motive? Rates, Debt & Politics

Trump has made it no secret — he wants interest rate cuts. Not tomorrow. Now.
Why? Because cutting rates:

• 🧾 Saves the government billions on interest payments (which are ballooning thanks to the $34T+ national debt).

• 📉 Boosts risk assets (hello, equities and crypto).

• 🗳️ Juices the economy right before an election.

But there’s a catch.
The Fed has historically avoided considering the government’s debt costs when making rate decisions. Instead, it focuses on inflation and economic stability — aka not playing politics.

And that’s where things could get... spicy.

Trump is reportedly eyeing loyalists like Kevin Warsh or Kevin Hassett — names that scream "rate cuts incoming" to markets already sniffing a dovish pivot.

📉 Markets React, Bitcoin Blinks

Even whispers of a Fed leadership change can send markets on a rollercoaster.
In the case of crypto — where expectations matter more than reality — this kind of signal could accelerate volatility.

Bitcoin is already flexing:

• 🟢 Market cap: $2.13T

• 🔄 24h volume: $51.7B

• 📈 90-day return: +23.03%

Any early announcement that leans dovish could be a green light for further upside — especially if paired with inflation easing and a “lower for longer” Fed narrative.

But on the flip side? Uncertainty over Fed independence could also spook traditional investors — and if the market smells fiscal irresponsibility, risk appetite could turn fast.

🧠 Nebular Take

This isn’t just about Powell or rates — it’s about control.
If Trump announces a new Fed Chair early, it’s a message: I’m setting the tone now, not in 2026.

That could mean a faster path to:

• 🏦 Lower rates

• 💵 Cheaper debt

• 🪙 Bullish momentum in crypto and equities

Or… it could erode trust in the Fed’s independence and trigger long-term volatility.

🦄 Chapter 4: Polymarket Hits $1B — But Can It Bet on Itself?

🚨 Prediction markets just got their first unicorn.
Peter Thiel’s Founders Fund is leading a $200M Series C in Polymarket, pushing its valuation to $1 billion — despite the fact that U.S. regulators still block it from its biggest market.

Let’s recap:
Polymarket lets people bet on real-world events using crypto — think “Will WWIII start before August?” or “Will Taylor Swift cancel her next concert?”

And it’s booming:

• 🔥 475K+ active traders

• 💰 $2B+ in volume just on 2024 election markets

• 📈 Elon’s X now natively displays Polymarket odds via Grok AI

That last bit is massive. The partnership exposes Polymarket to 600M+ monthly users on X — and gives Musk a subtle jab at regulators by amplifying a platform still technically off-limits in the U.S.

🏛 The Regulatory Plot Twist

Here’s the catch:
Polymarket paid a $1.4M fine in 2022 for violating U.S. derivatives laws, and the FBI literally raided the founder’s apartment in late 2023.

The platform now geoblocks U.S. users, but everyone knows that’s a band-aid. To justify a unicorn valuation, Polymarket has to eventually crack the U.S. market — or investors are just gambling on a gamble.

Meanwhile, rival Kalshi has been playing the legal long game for years, trying to get full CFTC approval to list political markets. They’ve got cleaner hands, but not the liquidity or momentum Polymarket has.

So we’ve got a decentralized platform thriving in a gray zone, big VC money pouring in, and regulators still on edge.

🧠 Nebular Take

This is the perfect case study of crypto’s regulatory paradox:

• You want decentralization and permissionless innovation?
  ✅ You get traction.

• You want legality and U.S. access?
  ❌ You get blocked or sued.

Prediction markets compress and price information better than polls or pundits ever could — and crypto rails make them fast, cheap, and trustless.

If Polymarket survives the legal gauntlet, it could become the Bloomberg Terminal of “what people really think will happen.”
If not? That $1B bet might look more like a meme coin with a better PR team.

🤡Memes of the week:

✅ Wrap-Up

Here’s the signal we’re seeing:

• Macro is wobbling (see: GDP contraction)

• The Fed is under pressure (see: Trump’s push + rate cut chatter)

• Bitcoin is flashing a statistically strong reversal pattern

• Capital is returning to on-chain opportunities (Polymarket, staking, etc.)

This isn’t the euphoria of 2021. It’s smarter capital entering a more mature space — and that’s exactly when asymmetric bets tend to pay off.

Stay sharp. Think in cycles. Stack smart.

– Daniel
Founder, Nebular

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.