TLDR:
- Bitcoin experienced a 11.7% decline in Q1 2025, its worst first-quarter performance in 10 years
- On-chain metrics show price stagnation despite increasing capital inflows
- CryptoQuant’s CEO projects the bear market could continue for at least six months
- Trump’s new reciprocal tariffs triggered market volatility affecting both traditional and crypto markets
- Historical data shows mixed outcomes following negative first quarters for Bitcoin
Bitcoin has registered its poorest first-quarter performance in a decade, dropping 11.7% during Q1 2025. This downturn comes as investors grapple with economic uncertainty and try to determine where Bitcoin stands in its market cycle. The decline raises concerns about the cryptocurrency’s short-term outlook amid changing economic conditions.
According to NYDIG Research, this performance ranked 12th out of 15 when looking at Bitcoin’s historical first quarters. The last time Bitcoin started a year this poorly was in 2015, following the 2013 market peak and the Mt. Gox exchange collapse.
Bearish Indicators from On-Chain Data
Technical analysis from industry experts suggests the downtrend may persist. CryptoQuant CEO Ki Young Ju highlighted in an April 5 post how current market conditions display classic bear market characteristics. The realized cap (measuring actual money entering Bitcoin) is increasing, but market capitalization isn’t growing proportionally.
This pattern indicates that even as new capital flows into Bitcoin, prices aren’t responding positively. Based on historical precedent, Ju notes that true market reversals typically take at least six months to develop, making a rapid recovery unlikely.
Early April saw Bitcoin fall to a three-week low of $77,077, continuing the negative momentum from the first quarter. Coinglass data confirms that Bitcoin’s Q1 decline of 11.8% was its worst first-quarter start since 2018.
#Bitcoin bull cycle is over — here’s why.
There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it’s considered a “buy,” and when it leaves, it’s treated as a “sell.” Using this idea, we can estimate an average cost… pic.twitter.com/xDHRin8N1K
— Ki Young Ju (@ki_young_ju) April 5, 2025
Historical Patterns Show Mixed Results
Looking at past market behavior provides some context but no clear direction. During the 2020 COVID-19 market panic, Bitcoin saw a 9.4% Q1 drop but rebounded dramatically to finish the year up over 300%.
However, the negative first quarters in 2014, 2018, and 2022 were followed by prolonged downturns. These years coincided with the conclusion of previous bull cycles, which may offer clues about current market positioning.
The broader economic environment adds another layer of complexity. President Trump recently implemented reciprocal tariffs against most countries worldwide. This policy shift caused massive market turbulence, wiping out $5.4 trillion in U.S. equity value in just two days.
Traditional markets felt immediate impacts, with the S&P 500 dropping to its lowest level in 11 months and the Nasdaq 100 entering bear market territory. While Bitcoin has shown relative strength compared to these markets, questions remain about its response to continued economic uncertainty.
Regulatory Shifts and Economic Factors
The current market backdrop contains contradictory signals for crypto investors. Donald Trump’s election victory in November 2024 after running a pro-crypto campaign initially generated positive sentiment in the sector.
Under the Trump administration, the cryptocurrency industry has gained more regulatory clarity. The SEC has retreated from various lawsuits against crypto companies, creating what appeared to be a favorable regulatory climate.
However, the administration’s broad tariff implementation has introduced new economic headwinds. These policies have led analysts to increase their recession probability estimates, potentially testing Bitcoin’s supposed role as a “U.S. isolation hedge.”
NYDIG’s research shows that weak first-quarter performance doesn’t automatically predict poor annual returns. Bitcoin has historically recovered in approximately half of the years when it started with negative returns. This pattern suggests that while the current outlook appears challenging, precedent exists for a potential recovery.
The coming months will be crucial in determining whether Bitcoin can gain new momentum or if the bear market will continue through 2025. Market participants will be monitoring shifts in on-chain metrics and broader economic conditions for signs of change.
