TLDR:
- Bitcoin fell 11.7% in Q1 2025, marking its worst first-quarter performance since 2015
- CryptoQuant CEO Ki Young Ju predicts the bear market could last at least six months
- Trump’s new reciprocal tariffs triggered market volatility and a $5.4 trillion U.S. equities wipeout
- On-chain data shows increased capital inflows aren’t driving up Bitcoin prices
- Historically, negative Q1 returns have had mixed effects on Bitcoin’s yearly performance
Bitcoin has recorded its worst first-quarter performance in a decade, sliding 11.7% during Q1 2025. This decline comes amid economic uncertainty and ongoing debate about the cryptocurrency’s market cycle position. The downturn raises questions about the future trajectory of the world’s largest cryptocurrency as investors navigate a complex economic landscape.
The Q1 performance ranked 12th out of the past 15 first quarters, according to data from NYDIG Research. This marks Bitcoin’s weakest start to a year since 2015, a period that followed the 2013 market peak and the collapse of Mt. Gox.
Market Indicators Point to Extended Bear Phase
On-chain data suggests the bearish trend could persist for some time. CryptoQuant CEO Ki Young Ju pointed out in an April 5 post that current metrics reflect a classic bear market condition. Despite rising capital inflows (shown by increasing realized cap), the market capitalization has not responded proportionally.
#Bitcoin bull cycle is over — here’s why.
There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it's considered a "buy," and when it leaves, it's treated as a "sell." Using this idea, we can estimate an average cost… pic.twitter.com/xDHRin8N1K
— Ki Young Ju (@ki_young_ju) April 5, 2025
This disconnect between capital entry and price movement indicates that even substantial purchases aren’t driving up Bitcoin’s value. Ju noted that based on historical patterns, a true market reversal typically takes at least six months, making a quick recovery unlikely.
Bitcoin dropped to a three-week low of $77,077 in early April. This continues the downward trend that characterized the first quarter of the year. According to Coinglass data, Bitcoin’s Q1 decline of 11.8% represents its worst first-quarter start since 2018.
Historical Context Offers Mixed Signals
Past performance during weak first quarters has yielded mixed results for Bitcoin’s annual returns. During the COVID-19 market panic in Q1 2020, Bitcoin experienced a 9.4% drawdown but rebounded dramatically to finish the year with over 300% gains.
However, negative first-quarter performances in 2014, 2018, and 2022 preceded prolonged downturns. These years coincided with the end of previous bull cycles, suggesting the timing within Bitcoin’s market cycle plays a key role in determining future price action.
The market faces additional pressure from macroeconomic factors. The Trump administration recently unveiled reciprocal tariffs against nearly every country worldwide. This policy move triggered massive market volatility, resulting in a $5.4 trillion wipeout in U.S. equities over just two days.
The S&P 500 index fell to its lowest level in 11 months, while the Nasdaq 100 entered bear market territory. Although Bitcoin has outperformed these traditional markets so far, uncertainty remains about how it will respond to continued market turbulence.
Policy Changes Create Market Uncertainty
The current market backdrop presents conflicting signals for cryptocurrency investors. Following Donald Trump’s election victory in November 2024, which came after a pro-crypto campaign, the sector initially saw positive momentum.
Under the Trump administration, the cryptocurrency industry has gained greater regulatory clarity. The U.S. Securities and Exchange Commission (SEC) has backed away from several lawsuits against crypto firms, creating a seemingly more favorable regulatory environment.
However, the recent implementation of broad tariff policies has created new economic headwinds. These tariffs have led analysts to increase their estimates of recession probability, which could test Bitcoin’s purported role as a “U.S. isolation hedge.”
NYDIG’s data indicates that a weak first quarter doesn’t necessarily doom Bitcoin’s annual performance. The asset has historically recovered in about half of the years when it started in negative territory. This suggests that while the current outlook appears challenging, precedent exists for recovery.
The months ahead will likely prove critical in determining whether Bitcoin can regain momentum or if the bear market will extend through 2025. Investors and analysts will be watching closely for signs of change in market dynamics and on-chain metrics.
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