- A renowned market pundit stated that altcoin prices may not return to December levels until at least April.
- Additionally, Trump’s tariff threats and massive liquidations have slowed the market’s recovery.
The cryptocurrency market is recovering slowly after a major sell-off triggered by fears of a global trade war and large-scale liquidations. U.S. President Donald Trump’s proposed 25% tariffs on Canada, Mexico, and China raised concerns about economic instability, causing investors to pull back from riskier assets like cryptocurrencies. According to crypto analyst Matthew Hyland, altcoin prices may not reach their December highs until April or later.
Market Turmoil and Liquidations
On February 3, the crypto market experienced one of its largest liquidation events in history, with over $2.24 billion wiped out within 24 hours. Some experts, like Bybit CEO Ben Zhou, estimate the actual figure could be as high as $8–10 billion. “I am afraid that today’s real total liquidation is a lot more than $2 billion, by my estimation, it should be at least around $8 billion -10 billion,” he said in a recent post on X.
Considering this was the largest liquidation event in #Crypto history it likely means the low is in however in 2020 & 2022 it took over 2 months for the full recovery to take place
You likely wont see those December highs on most #Alts for a minimum of 2 months if not longer so… pic.twitter.com/t5Zah7SN6s
— Matthew Hyland (@MatthewHyland_) February 4, 2025
This sell-off was fueled by concerns over U.S. President Donald Trump’s proposed tariffs on Canada, Mexico, and China, which raised fears of a global trade war. Despite Trump’s recent turnaround on Canada and Mexico tariffs, Bitcoin continues to trade below the psychological $100,000 price level.
Bitcoin, the leading cryptocurrency, dropped below $100,000 for the first time since January 27, hitting a low of $92,584. Although it briefly recovered to $102,000 the next day, it has since fallen back to $97,570. Hyland believes the market has hit its lowest point but warns that a full recovery could take months.
Historical Events Suggest Slow Recovery
Hyland points to past events that caused similar market disruptions, such as the COVID-19 crash in 2020 and the collapses of Terra and FTX in 2022. In 2020, Bitcoin lost 47% of its value in a single day but took five months to recover fully. Similarly, the 2022 crashes took months to stabilize.
“I will gladly be wrong but assuming there will be a straight recovery within days is just not likely and will probably make you uneasy if it doesn’t happen. Even a V shape like 2020 took weeks with many dips on the way back up,” Hyland said in a recent post on X.
He goes on to advise investors to remain cautious. “You likely won’t see those December highs on most altcoins for a minimum of two months, if not longer,” he said. “Keep expectations tempered and just expect it to take time.”
The combination of external and internal environmental pressure suggests that the road to recovery will be gradual. Investors are advised to focus on long-term strategies rather than expecting quick gains.