Crypto Market Recovery Delayed: Analysts Predict Months of Turbulence Ahead
The cryptocurrency market may require until April to fully recover from recent turbulence triggered by tariff threats from U.S. President Donald Trump. A crypto analyst suggests that altcoins may not return to their December peaks for at least a couple of months, urging investors to temper their expectations.
This outlook stems from a historical liquidation event that occurred on February 3, during which over $2.24 billion was wiped from the crypto markets within a single day. Some industry commentators believe the actual figure could be considerably higher, with estimates reaching upwards of $10 billion. The crisis coincided with heightened fears surrounding a potential trade war, sparked by Trump’s proposed 25% tariffs on Canada, Mexico, and China. Although the tariffs on Canada and Mexico were later paused as negotiations ensued, the market reaction was already in motion.
On February 3, Bitcoin experienced a significant decline, dropping to $92,584 and falling below the crucial $100,000 level for the first time since late January. While it briefly recovered to above $102,000 the following day, it has since retraced and was trading around $97,570.
The analyst highlights that previous market disruptions, such as the onset of the COVID-19 pandemic in 2020 and the collapses of the Terra blockchain and the FTX exchange in 2022, took months for the market to recover from. A rapid recovery akin to a “V-shaped” bounce is unlikely; past events have demonstrated that it often takes several weeks, punctuated by setbacks, for the market to regain stability.
Given these historical precedents, investors should prepare for a potentially lengthy road to recovery, recognizing that patience will be essential in the coming months.