Well that was quick.

Just 16 months after the cryptocurrency market reversed a grinding slide and reached all-time highs in the “euphoria zone,” the bull market is collapsing.

And the reason is simple: Donald Trump.

At least, this is what myriad market metrics indicate as the new administration’s protectionism spooks investors.

“Every onchain metric signals a bear market,” said Ki Young Ju, the CEO CryptoQuant, a crypto analytics firm.

“With fresh liquidity drying up, new whales are selling Bitcoin at lower prices,” he said on X on March 17.

Ju added a stark prediction: Expect six to 12 months of bearish or sideways price action.

Heading sideways

It’s not hard to spotlight the moment the greatest crypto market in history went sideways.

After more than doubling in 2024, the total value of the asset class has dropped 27%, to $2.8 trillion, since Trump was inaugurated as president on January 20.

Bitcoin has skidded 16%, to $81,602, in the last 30 days as Trump has rocked the capital markets with his flip-flopping tariffs on imports from Canada and Mexico, the US’ top two trading partners, as well as China.

Other markets are also plunging.

The bellwether S&P 500 index has fallen 8.6% in the last month, and the tech-heavy Nasdaq is down even more.

The share price of Tesla, the electric vehicle juggernaut led by Elon Musk, has nosedived an astonishing 47% since he started work as the administration’s cost-cutting czar.

With Trump showing no signs of easing off on his tariff-driven economic policies, there’s little hope investors will get some respite from a market that feels like it’s spiralling.

Risk-off

The next big marker will be the Federal Reserve’s call on interest rates.

Before Trump was elected president, the economy had been growing and inflation had fallen to a three-year low.

Now even Trump himself is telegraphing a recession.

Moreover, tariffs tend to pass along price hikes to consumers and businesses so the Fed may be inclined to hold off on lowering rates to avoid exacerbating inflation.

‘If the Fed maintains a hawkish stance a significant price recovery in the short term is unlikely.’

—  James Butterfill, CoinShares.

Investors in risk-on assets such as stocks and cryptocurrencies won’t like that at all.

Those asset classes tend to surge when rates fall as the market rotates out of fixed income instruments such as bonds into juicier risk-on securities.

When rates stay high or rise, investors seek returns from bonds, and safety in gold, which is at an all-time high of $3,035 an ounce.

“Investors are less willing to take on risky bets,” Eliezer Ndinga, the head of strategy at 21Shares, a crypto ETP provider, told Inside Solana.

Hedging bets

Institutional investors have already seen enough.

Over the past five weeks, they withdrew more than $6 billion from Bitcoin ETFs, according to James Butterfill, head of research at crypto research firm CoinShares.

And uncertainty is the watchword of the moment.

Ndinga said geopolitical tensions, supply-chain snags, corporate earnings concerns, among others — tends to push people out of volatile assets.

“When you look at the recent slide in Bitcoin and other cryptocurrencies, it’s really a reflection of the broader mood in financial markets right now,” Ndinga said.

Even so, he isn’t as bearish about Bitcoin. “We’re still seeing consistent Bitcoin accumulation from long-term holders,” Ndinga said.

Sure enough, Bitcoin has a tendency to rebound and reward hodlers.

Arthur Hayes, the angel investor and crypto veteran, remains unfazed.

He reckons Bitcoin’s correction is a temporary liquidity squeeze. Once that cycle turns, it will soar to $250,000 by year-end, he said in a March 14 interview with Bitcoin.com News.

But for now, Bitcoin could very well revisit $74,000, he said.

Macro storm

On Wednesday, all eyes will turn to the Federal Open Market Committee meeting.

“If the Fed maintains a hawkish stance a significant price recovery in the short term is unlikely,” Butterfill told Inside Solana.

James Check, former senior Glassnode analyst, says stasis may be the best bet.

“My base case is that we probably have to chop around inside this air-pocket for a little while yet,” Check wrote in his newsletter Checkonchain on March 17.

The “Air Pocket” he’s referring to is a range between Bitcoin’s previous all-time high of $74,000 and $86,000 — a gap that was overshot by investors who bought into Trump’s pro-crypto campaign slogans.

“The macro storm isn’t over yet, so I am staying cautious,” Check said.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.