Bitcoin prices fell 22% from their record highs on January 20, 2025, Donald Trump’s inauguration day. Despite this decline, analysts suggest that the current recession is likely to be a temporary shakeout rather than the end of Bitcoin’s bull market cycle. Bitcoin prices are recovering, and technical indicators show that while there is a bearish movement, this revision is typical of the cryptocurrency market cycle.
Bitcoin’s four-year cycle remains an important factor in understanding price fluctuations, according to analysts at Bitfinex. They explain that pullbacks during bull market cycles are not uncommon, and this drop may simply be a short shakeout leading up to the rebound. Despite some technical indicators being bearish, historical trends indicate that Bitcoin tends to recover after such a decline. Analysts also said the correlation between the market and traditional financial markets, particularly the S&P 500, suggests that Bitcoin can find its bottom alongside the movement of the stock market. They highlighted the $72,000 to $73,000 range as the main support level for Bitcoin prices.
Nexo’s temporary analyst Iliya Kalchev has further strengthened his view that Bitcoin’s harving events remain important to long-term price trends. He acknowledged that Bitcoin’s combined annual growth rate (CAGR) fell to an historic low of 8%, raising questions about the effectiveness of the four-year cycle. However, he believes that the Harving event, which reduces the Bitcoin Network’s block reward to 3.125 BTC, still plays a key role in cryptocurrency price action. Since the last half of April 2024, Bitcoin prices have risen by more than 31%.
The launch of Bitcoin Exchange-Traded Funds (ETFS) is also involved in supporting Bitcoin’s market performance. With cumulative holdings exceeding $125 billion at peak times, these ETFs reflect an increase in institutional adoption of Bitcoin. Despite current volatility, this institutional interest, combined with half, provides a strong foundation for future price movements.
Bitcoin’s market behavior continues to be affected by wider economic conditions, including global financial yields and stock market trends. Analysts warn that long-term economic tensions and trade wars can negatively affect investors’ feelings, despite already being priced.
Despite the current recession, many are optimistic about the future of Bitcoin. Although short-term revisions are expected, Bitcoin’s historic cycle, half-events and institutional interest are seen as powerful factors that continue to shape price movements.