Market sentiment has taken a sharp downturn a month after the S&P 500 reached a record high. The once-prevailing optimism around U.S. economic strength has faded, leading to substantial losses for major hedge funds, rising geopolitical risks, and Bitcoin’s struggle to maintain support around the $80,000 mark.

Large hedge funds have been hit hard by the recent selloff. Millennium Management recorded losses of $900 million from two of its trading teams, while Brevan Howard's Master Fund is down 5% since the beginning of the year, resulting in tighter risk management policies. 

The widespread decline has led to a liquidation of momentum trades, casting uncertainty over near-term market movements.‍

Rising Geopolitical Risks Add Pressure

Trade tensions continue to escalate, with Canada, China, and the European Union retaliating against US policies, contributing to rising costs. A key event to watch is April 2, when former President Donald Trump is expected to introduce another round of reciprocal tariffs, which could intensify pressure on financial markets.

In the Middle East, ongoing conflicts add another layer of uncertainty, yet energy prices have remained relatively stable. 

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Analysts at QCP Capital suggest that policy shifts in the US, particularly concerning oil production, may be counteracting potential price hikes. The global trade slowdown is also weighing on demand expectations. Amid these conditions, gold is increasingly seen as a safer asset than oil due to its historical role as a hedge against uncertainty.

The Federal Open Market Committee (FOMC) is expected to keep interest rates unchanged during its upcoming meeting. Investors will closely analyze any changes in the Fed’s stance on growth and inflation. While tariffs may take months to affect the broader economy, the April 2 trade decision remains a major factor influencing the central bank’s next steps.‍

Bitcoin at $80K: A Stable Floor or Temporary Support?

Bitcoin has managed to hold the $80,000 level, but its stability remains fragile amid broader economic concerns. The ongoing unwinding of leveraged positions and risk-averse sentiment continue to impact BTC’s price action. 

Currently, Bitcoin trades at $83,679.85, showing a 1.03% gain in the last 24 hours and a 1.84% increase over the past week, according to CoinMarcketCap. With 19.82 million BTC in circulation, the supply is edging closer to its 21 million cap, reinforcing its long-term scarcity.

With no clear signs of a market rebound, investors are focusing on capital-preserving strategies to manage risk. As uncertainty looms, the coming weeks will be crucial in assessing the impact of geopolitical tensions, Federal Reserve policies, and trade developments on global financial markets.