$BTC An economic downturn is an economic condition characterized by a significant decline in business and investment activity, as well as a decrease in demand for goods and services, leading to a slowdown in economic growth or a complete halt. A downturn typically occurs as a result of multiple factors, such as rising interest rates, inflation, declining consumer confidence, or geopolitical crises. During a downturn, most economic sectors experience negative consequences, corporate profits fall, unemployment rises, and government and private spending decrease.

In financial markets, a downturn is often reflected in falling stock prices and reduced trading volumes, causing investors to seek safe assets such as gold or the dollar. It is important to distinguish between "economic downturn" and "a market in a state of calm," as the former is related to macroeconomic performance, while the latter refers to a state of temporary tranquility in the market.