Fear of a looming recession, coupled with escalating trade tensions between the U.S. and Canada, triggered Bitcoin price drops and altcoin sell-offs on Sunday night.

The Atlanta Federal Reserve’s GDPNow model has revised its forecast for the first quarter of 2025, predicting a GDP contraction of 2.4%. This downward revision, which follows weaker-than-expected consumer spending and a widening trade deficit, has heightened concerns about a potential recession.

However, President Donald Trump remained optimistic about the economy in an interview with Fox News’ Sunday Morning Futures.

“I hate predicting things like that, but I think our economy is going to be incredible,” Trump said.

The president’s comments come as the U.S. faces a crucial juncture in its trade negotiations with Canada, which have been a major source of market volatility this year.

Trump’s tariffs on imports from countries like Canada, Mexico, and China are part of his broader strategy to bring wealth back to America, a transition he says will take time.

“We’re making great progress. We have the best numbers in the history of our country, but they didn’t get that way quickly. It's taken a long time to get that way, and they're not going to go bad quickly, I can tell you that,” Trump added.

The U.S. president defended his approach, stating that it’s the only way to achieve his economic goals.

“If you want to do it the easy way, you can do it the way the other presidents did it, where they lose trillions of dollars and they close up the country and they become very unpopular.”

Also on Sunday, Mark Carney won the Liberal Party leadership election, replacing Justin Trudeau as Canada’s prime minister.

The new prime minister-elect went off on Trump in his first speech. He said that Trump won’t succeed in his trade war with Canada.

“America is not Canada. And Canada never, ever, will be part of America in any way, shape or form,” Carney said.

Trump has repeatedly referred to Trudeau as the “Governor” of Canada, suggesting that Canada would be better off as the 51st U.S. state.

“My government will keep our tariffs on until the Americans show us respect,” he said. Canada has imposed 25% tariffs on U.S. consumer goods in retaliation to Trump’s tariffs.

Bitcoin fell below $81,000 following Carney’s victory, according to CoinGecko data. At press time, BTC recovered slightly above $82,000, down 4% in the last 24 hours.

Ether and XRP each shed more than 6%, while Dogecoin dropped over 10%.

Other top coins like BNB, Solana, Cardano, and TRON also saw significant losses, while lower-cap tokens such as Injective, Maker, and Render experienced double-digit drops.

The total crypto market capitalization decreased 6% to $2.8 trillion within a day. Leveraged liquidations reached $600 million, with approximately $530 million in long positions eliminated, according to Coinglass data.

This deepens the market turmoil that arose after Trump’s Thursday executive order establishing a Strategic Bitcoin Reserve sparked selling pressure due to limited details about funding.

The order mandates the purchase of Bitcoin to fill the reserve, with the initial allocation coming from existing U.S.-held Bitcoin.

However, U.S. Treasury Secretary Scott Bessent said Friday that discussions are underway about additional BTC acquisitions and the next steps to be taken.

Bessent also noted the need to halt the sale of seized Bitcoin, which is currently used to offset the federal deficit.