The cryptocurrency market has experienced a notable downturn in 2025, with Bitcoin seeing a decline of around 14% from earlier levels. Current figures indicate that it remains approximately 26% below its historic peak recorded in January. This drop has been influenced in part by market volatility and shifts in economic policy, notably those implemented by President Trump, whose strategies continue to leave their mark on financial markets.
Despite this weakness, several macroeconomic metrics signal potential for an eventual market rebound. Experts are closely watching trends that link Bitcoin with the expansion of the global money supply (M2), as well as its inverse relationship with the strength of the US Dollar, measured by the DXY index.
Drivers That May Spark a Bitcoin Rally
According to Christopher Harvey of Wells Fargo, historical patterns suggest that Bitcoin typically moves inversely to the DXY, albeit with a delay of roughly 10 weeks. He explains that the recent price adjustment might be a reaction to the strong performance of the dollar observed in the final quarter of 2024.
Similarly, Ed Engel from Compass Point has pointed out that as global liquidity increases and the dollar loses strength, Bitcoin tends to benefit. With evidence now showing that the global money supply (M2) began a recovery earlier in 2025, market analysts are watching for potential improvements in the cryptocurrency’s performance during the second quarter.
Ongoing Challenges Within the Cryptocurrency Sector
Even with positive indicators on the horizon, the cryptocurrency industry continues to face significant hurdles. Although President Trump’s administration has voiced its commitment to establishing a supportive regulatory framework for digital assets, clear and detailed rules for these firms are still lacking.
Furthermore, lingering concerns about an extended trade conflict have had a dampening effect on overall market sentiment. This uncertainty could further delay the anticipated recovery for Bitcoin, keeping the market cautious as it looks ahead.
Key Price Levels Essential for a Bullish Turn
Research from Wolfe highlights that a short-term bullish reversal in Bitcoin would likely require the asset to break through the price range of $91,000 to $92,000. Although there is hope for a rebound, ongoing macroeconomic pressures suggest that additional softness may persist into early 2025 before a significant rally could emerge in the latter part of the second quarter.
Monitoring these economic and regulatory trends remains crucial for investors and market participants. As the environment evolves, a careful analysis of liquidity measures and currency strength will be key in determining whether Bitcoin can reclaim its momentum in a shifting financial landscape.
Maxwell Reed is the first editor of Cryptovista360. He loves technology and finance, which led him to crypto. With a background in computer science and journalism, he simplifies digital currency complexities with storytelling and humor. Maxwell began following crypto early, staying updated with blockchain trends. He enjoys coffee, exploring tech, and discussing finance’s future. His motto: “Stay curious and keep learning.” Enjoy the journey with us!