Bitcoin (BTC-USD) eked out gains on Thursday even as fresh data revealed that the US economy contracted in the first quarter, stoking fears of an impending recession. The world’s largest cryptocurrency climbed by around 1% to hover around the $95,000 (£71,401) mark, as traders weighed mixed signals from both traditional and digital asset markets.

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The overall crypto market cap remains consolidated near the $3tn (£2.25tn) mark, reflecting a period of sideways trading following recent volatility.

Analysts are predicting a potential breakout for bitcoin, should positive macroeconomic news or favourable regulatory developments materialise.

Meanwhile, spot bitcoin exchange-traded funds (ETFs) saw an outflow of $56m (£42m) on Wednesday, ending an eight-day streak of inflows that totalled nearly $3bn (£2.25bn). This reversal highlights investor caution amid broader economic uncertainties.

Altcoins largely mirrored bitcoin’s muted performance. Ethereum (ETH-USD), BNB Chain’s BNB (BNB-USD), and Solana’s SOL (SOL-USD) increased 1%, 0.5% and 2.4% respectively.

XRP (XRP-USD) and Cardano’s ADA (ADA-USD) both dipped about 0.5%, over the past 24 hours. Dogecoin (DOGE-USD) increased around 1.5% in the same period.

US stock indices closed mixed on Wednesday, capping a particularly turbulent month for equities. The S&P 500 (^GSPC) rose 0.15% and the Dow Jones Industrial Average (^DJI) gained 0.35%, while the Nasdaq Composite (^IXIC) slipped 0.09%.

Earlier in the session, markets tumbled on the news that US GDP contracted by 0.3% in Q1 — a sharp reversal from the 2.4% growth posted in the final quarter of 2024. This marks the first US economic contraction since Q1 2022 and precedes the full impact of recent tariffs on imported goods.

Investor sentiment has been particularly sensitive to US president Donald Trump’s shifting tariff proposals. Stocks had rallied in late April after administration officials hinted at possible trade deals to cool the ongoing trade war, but Wednesday’s GDP surprise dampened that optimism. By the close, both the S&P 500 and Dow had recovered much of their early losses, suggesting that traders remain hopeful for a policy resolution.

US equity futures opened higher Thursday, with Dow futures (YM=F) up 0.41%, S&P 500 futures (ES=F) rising 0.92% and Nasdaq futures (NQ=F) jumping 1.4% in pre-market trading.

With recession fears rising, market participants will be closely watching upcoming Federal Reserve communications, US April consumer spending data, and any further signals on trade negotiations. According to the CME FedWatch tool, interest rate traders currently assign just a 5% probability to a Fed rate cut at next Wednesday’s FOMC meeting.