FameEX Hot Topics | Could Trump’s Trade War Accelerate the End of the Bitcoin Bull Market?

On February 3, Bitcoin experienced a sharp decline, falling below $92,000 and triggering an eye-watering $2.1 billion in liquidations. The initial panic among investors seemed to stem from concerns over the economic fallout from U.S. President Donald Trump’s tariff war. However, as the day progressed, the focus shifted toward a more pressing question: Had Bitcoin already reached its peak, and was it now entering a downtrend? The fear that the bull market was over loomed large as the cryptocurrency market faced significant turbulence.

Bitcoin Archive highlighted a concerning historical pattern: every Bitcoin bull market had peaked within 330 days of breaking its prior all-time high. With February 4 marking day 328 of the current cycle, market sentiment turned increasingly skeptical. Traders and analysts were unsure whether this pattern would hold or if Bitcoin was poised to extend its rally. As the price fell, the weight of these historical trends added an extra layer of uncertainty, heightening the sense of anxiety in the market.

Despite the unsettling drop, Bitcoin’s recovery was rapid. Several factors helped the market rebound, including a pause on tariffs with Mexico and Canada announced on February 3. Additionally, President Trump’s appointed Crypto Czar, David Sacks, was scheduled to deliver a speech on February 4, which seemed to calm investor nerves. The Fear & Greed Index, which had briefly dipped into the "fear" zone at 44, quickly surged to 72, signaling a shift in sentiment back to "greed." However, this swift rebound raised concerns that the market might have recovered too quickly, with macroeconomic and geopolitical uncertainties still looming. Analysts warned that the market could be walking into a bull trap.

On-chain data, which tracks real-time blockchain transactions, could provide deeper insights into Bitcoin’s true demand during these uncertain times. Despite the volatility triggered by the tariff scare, Bitcoin demonstrated its resilience. It continued to absorb pullbacks, even when the price exceeded $90,000, suggesting strong ongoing demand. This trend suggests that the market may not be as fragile as it first appeared and that investors remain committed to Bitcoin’s long-term prospects.

Glassnode’s analysis of Bitcoin’s past bull market cycles suggests that demand for BTC could actually rise further in the coming months. Looking at previous cycles (2011-2015, 2015-2018, and 2018-2022), the typical pattern involved corrections averaging around 25%, followed by an accelerated price increase during the final third of the bull market. With the current cycle showing signs of similar behavior, the potential for a “second euphoric phase” in Bitcoin’s price could be on the horizon, although the risks remain.

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