When Will Bitcoin’s Downtrend End?
Bitcoin’s performance in the first quarter of 2025 recorded the worst results in nearly a decade. Despite the price soaring to a historical high of $109,590 at the beginning of the year, the quarter closed with a nearly 11% decline.
The market’s initial optimistic expectations regarding Trump’s potential victory and the implementation of pro-cryptocurrency policies quickly morphed into a textbook-like “sell the news” situation, as substantial regulatory reforms have yet to materialize.
Since its historical peak, Bitcoin has dropped as low as $77,041, with a maximum retracement of nearly 29%. It has since mainly oscillated within the trading range of $78,000 to $88,000.
However, the market structure remains favorable for Bitcoin. Despite a significant drop in the total market capitalization of cryptocurrencies, Bitcoin’s dominance has risen to over 61%, indicating that funds are rotating from higher-risk altcoins to Bitcoin in an environment of increasing macro uncertainty.
Altcoins like Ethereum and Solana have fallen 35%-50% from their cyclical highs, further reinforcing Bitcoin’s position as the “reserve asset” of the cryptocurrency market.
As the second quarter begins, market price trends remain highly dependent on macroeconomic signals. The Federal Reserve’s policy direction and ETF capital flows will continue to dominate market direction.
Although signs of panic selling among current investors have eased somewhat, the market will still need to wait for sufficiently influential catalyst events to establish a trend-breaking movement in the context of ongoing liquidity tightening.
From a macroeconomic perspective, certain sectors of the U.S. economy are showing resilience, such as a narrowing trade deficit and increased durable goods spending, but these bright spots are overshadowed by deeper structural concerns. Inflation has accelerated beyond expectations due to factors such as new tariff policies raising import costs. The core inflation rate rose by