FameEX Hot Topics | Is Trump’s Trade War Speeding Up the End of the Bitcoin Bull Market?

On February 3, Bitcoin experienced a sharp drop, falling below $92,000 and triggering a staggering $2.1 billion in liquidations. The sudden decline sent shockwaves through the cryptocurrency market, leaving investors in a state of panic. Initially, the sell-off appeared to be driven by concerns over the economic impact of U.S. President Donald Trump’s tariff war, which heightened fears of financial instability. However, as the market continued to decline, attention shifted to a more pressing concern: Had Bitcoin already peaked, and was it now entering a downtrend? The looming fear that the bull market was nearing its end created a highly volatile environment for traders and investors alike.

Further compounding market anxiety, Bitcoin Archive pointed to a historical trend that has defined previous bull market cycles. According to past data, every Bitcoin bull market has historically peaked within 330 days of breaking its previous all-time high. With February 4 marking day 328 of the current cycle, many analysts and traders began questioning whether Bitcoin was following this same pattern. The uncertainty surrounding the market cycle intensified, as investors debated whether Bitcoin had more room to grow or if history was repeating itself. The weight of these historical trends added to market skepticism, increasing volatility and heightening investor concerns about a potential market top.

Despite the dramatic decline, Bitcoin rebounded quickly. Several factors contributed to this recovery, including the announcement on February 3 that the U.S. would pause tariffs on Mexico and Canada. Additionally, President Trump’s appointed Crypto Czar, David Sacks, was scheduled to deliver a speech on February 4, which seemed to restore some investor confidence. The Fear & Greed Index, which had briefly plummeted to 44, indicating market fear, quickly surged to 72, reflecting renewed optimism. However, this rapid recovery raised concerns about the possibility of a bull trap—where a temporary price surge misleads traders into believing the market is stable, only for prices to fall again. With macroeconomic and geopolitical uncertainties still looming, some analysts warned that the recovery might not be as strong as it seemed.

One of the key indicators to assess the sustainability of Bitcoin’s rebound is on-chain data, which tracks real-time blockchain transactions. Despite the recent volatility, Bitcoin has shown remarkable resilience, continuing to absorb pullbacks even at price levels exceeding $90,000. This strong demand suggests that the market remains robust, with long-term investors maintaining confidence in Bitcoin’s value. The ability of Bitcoin to recover from sharp corrections indicates that the market may not be as fragile as it initially appeared, reinforcing the belief that institutional and retail investors are still committed to the long-term potential of digital assets.

Looking ahead, historical market patterns suggest that Bitcoin could still have significant upside. Glassnode’s analysis of previous bull markets (2011-2015, 2015-2018, and 2018-2022) shows that corrections averaging around 25% were often followed by a final surge in price performance. If the current cycle follows this trend, Bitcoin may not have reached its ultimate peak yet. Some analysts believe that a “second euphoric phase” could be on the horizon, where Bitcoin experiences another period of accelerated growth before the bull market finally comes to an end. However, risks remain, and traders must remain cautious as global economic conditions continue to evolve.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.