The crypto asset market has experienced great pressure since the beginning of the week, precisely on February 3, 2025. This negative sentiment was triggered by the new import tariff policy announced by the President of the United States, Donald Trump. The policy targets several major trading partners, including China, Canada, and Mexico, thus creating uncertainty in the global financial market, including the crypto sector.
The direct impact of this policy is seen in the drastically plummeting price of Bitcoin. From the initial level of around US$99,000, the price of Bitcoin was recorded to drop below US$92,000 in just one day. As a result of this high volatility, the total liquidation that occurred in the derivatives market reached US$2,3 billion on the same day.
Initially, market participants anticipated the economic impact of the trade war triggered by Trump's policy. However, concerns are quickly shifting to greater speculation, including whether Bitcoin has reached its peak and will soon enter a downtrend.
One of the factors that strengthen this speculation is the analysis from Bitcoin Archive, which shows historical patterns in each bull market cycle. In the previous three cycles, Bitcoin always reached its peak in 330 days after successfully breaking through the highest level from the previous cycle.
There is Still a Potential for Market Recovery
Although the current selling pressure is high, Bitcoin still has the momentum to recover, especially thanks to other Trump policies. For example, the US government itself decided to postpone the implementation of new tariffs on Canada and Mexico, which gave positive sentiment to investors.
In addition, the speech from Crypto Czar AS, David Sacks, who announced that he would focus on stablecoin regulation and national Bitcoin reserves also increased market optimism.
The Fear & Greed crypto index, which had plummeted to the level of 44 (Fear) on February 3, has now surged back to 54 (Neutral), indicating an increase in investor confidence even though China announced a reciprocal import tariff policy on the same day.
Towards the Second Euphoria Bitcoin
Broadly, Glassnode analysts revealed that Bitcoin may be entering a phase called the "second euphoria", which is a period of significant price spikes after a major correction in the middle of the bull market cycle.
In the previous three cycles, including 2011-2015, 2015-2018, and 2018-2022, the average correction that occurred reached 25%, before Bitcoin set a new record again.
The results of the analysis said that the 2022-2025 cycle has a similar pattern to 2015-2018. However, there is no guarantee that growth will follow the same pattern.
For comparison, in the 2013-2017 cycle, Bitcoin experienced a surge of 113 times from its lowest point. However, in the next cycle which is in 2018-2021, the increase is only about 20 times. This is because with the growing maturity of the Bitcoin market, the growth rate tends to slow down because a much larger flow of capital is needed to push the price to a new level.
Currently, BTC has increased six times from its lowest point at US$16,000 in December 2023. Following this historical pattern, it is estimated that Bitcoin can reach a peak in the range of US$160,000 to US$210,000 at the peak of this cycle.
This prediction is in line with various analyst projections, for example VanEck who estimates that Bitcoin has the potential to rise to US$180,000, and Bitwise and Bernstein who predict Bitcoin can touch US$200,000.
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