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In recent weeks, Bitcoin (BTC) has dipped around 20% in what has felt like a freefall, pulling the cryptocurrency away from its all-time high of over $109,000, recorded in mid-January 2025. The drop of 20% technically signals Bitcoin is entering into a bear market, with panic setting in as short-term holders moved around 80,000 BTC to exchanges last week. While selling pressure mounts and market sentiment turns bearish, investors question whether the current turndown is a temporary correction or the beginning of a prolonged decline. At the time of writing, the crypto market is showing greater resilience, with Bitcoin now some 19% up on its recent low of $78,000. As with any market, every cloud has a silver lining, and if Bitcoin is experiencing a correction, it is also a chance for investors to “buy the dip”.
This article takes a closer look at Bitcoin’s journey over the past six months, how macroeconomic and political factors might be influencing the cryptocurrency’s recent fluctuation, and what the experts say about Bitcoin entering into a bear market.
The last six months of Bitcoin
Over the past six months, Bitcoin has experienced a rollercoaster of change, including several new all-time highs. Between August and December 2024, Bitcoin surged from around $53,000 to over $93,000 on the last day of the year, going on to reach an unprecedented all-time high of $109,000 on the 25th of January. This enthusiastic rally was fuelled by optimism surrounding the U.S. presidential election, major inflows into spot Bitcoin ETFs and increased institutional interest in Bitcoin. However, towards the end of January, Bitcoin dropped by over 20%, signaling the start of a potential bear market.
Several factors contributed to this downturn. Macroeconomic uncertainty, including inflation concerns and proposed trade tariffs under the new Trump administration, led investors to reassess risk exposure. A $1.5 billion hack on the crypto exchange Bybit shook market sentiment further, while Bitcoin spot ETFs experienced the second-largest outflow of the year on Monday, which peaked at $516.4 million. As of late early March 2025, Bitcoin is trading at around $92,000, reflecting the crypto market’s ongoing volatility.
Political factors influencing Bitcoin’s downturn
Despite the enthusiasm for Donald Trump from the crypto community leading up to the November 2024 presidential elections, reflected in Bitcoin’s bull run, since the new President took office, Bitcoin’s value has fallen steadily, breaking through support at both $94,000 and $91,500 before settling at a low of around $88,000. Back in July 2024, Donald Trump gave a rousing keynote speech at the Bitcoin Conference, in which he promised to enact several pro-crypto policies, including clearer regulations, reduced government oversight, a national U.S. Bitcoin reserve, and support for national Bitcoin mining operations.
Since taking office, however, his administration’s lack of action, coupled with rising geopolitical concerns, has led to uncertainty in the market. The executive order signed on the 23rd of January established a working group to propose a comprehensive regulatory framework for digital assets within 180 days. But this delay has sparked further uncertainty. Experts are also pointing the finger at Trump’s trade tariffs and geopolitical tensions, which have left investors feeling uneasy and more risk-averse. Macro financial markets have also taken a hit recently. The Nasdaq 100 has suffered its worst three-day decline in two months, and investors have been seen shifting toward safer assets such as bonds.
What the experts say about Bitcoin entering into a bear market
As Bitcoin’s value continues to drop, experts are divided on whether this dip marks the onset of a bear market, or whether it is a temporary correction. Despite the frenzy, many caution against labeling the dip as a bear market. For example, John Bollinger, the creator of the Bollinger Bands technical analysis tool, published “NOT SO FAST!” in a post on X, in response to headlines announcing a Bitcoin bear market.
In a call for patience, Bollinger encouraged investors to wait for a sustainable bottom before making definitive judgments and decisions. Whether this turns out to be a correction or not, it is a chance for investors to “buy the dip”, as suggested by macro analyst, Julien Brigden. Other voices from the crypto space do believe Bitcoin could dip further. Arthur Hayes, Chief Investment Officer at Maelstrom, suggests Bitcoin could drop to $70,000, again citing Trump’s trade tariffs as potential aggravators.
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