The cryptocurrency market recently experienced a significant drop, resulting in record liquidations. While many are hoping for a market rebound, experts believe that recovery may take longer than anticipated. Here’s what to expect from the cryptocurrency market in the coming days and weeks.
Market Enters Turbulent Zone
On February 3rd, the digital asset market faced one of the largest liquidations in its history, with over $2.24 billion liquidated in less than 24 hours. Bybit’s CEO estimates that the actual figure could be between $8 and $10 billion:
“I fear the total liquidation today is much higher than $2 billion; my estimates suggest it should be around $8 to $10 billion,” said Bybit’s CEO.
This significant downturn is attributed to concerns over a trade war, exacerbated by the announcement of new tariff proposals by Donald Trump targeting Canada, Mexico, and China. Just hours after the announcement, negotiations ensued, leading Trump to freeze the tariff increase for 30 days. However, by then, the damage to the crypto market was already done. Bitcoin dipped below the psychological threshold of $100,000 and has struggled to reclaim that level since.
Notable trader Matthew Hyland believes that the lowest point of this cycle may have already been reached. He cautions that recovery might take longer than hoped, drawing on past events and similar liquidations for his assessment.
What Does Market History Teach Us?
Hyland refers to past events that have led to similar market disruptions. For instance, during the COVID-19 crisis in 2020, Bitcoin experienced a 47% drop in a single day, taking five months to recover. Similarly, the collapse of Terra and FTX in 2022 required a lengthy recovery period.
“While I would be happy to be mistaken, expecting an immediate recovery within a few days is unrealistic and could lead to discomfort if it doesn’t happen,” Hyland cautioned.
He further warns investors:
“You likely won’t see December highs for most altcoins for at least two months, if not longer. Maintain moderate expectations and be prepared for a slow process.”
Given these factors, he concludes that the market’s recovery will be gradual and recommends adopting a long-term strategy. In terms of timing, Hyland does not expect any significant movement before April.
In the interim, some presales could provide opportunities for positioning ahead of a bullish market. For example, Mind Of Pepe, which combines memecoins with AI, is gaining impressive traction.
Disclaimer: Cryptocurrencies are a high-risk asset class. This article is for informational purposes only and does not constitute investment advice. You could lose your entire capital.
Source: X by Matthew Hyland
Further Reading:
- 3 RWAs to Follow Closely for the 2025 Bull Run
- These 3 Altcoins Will Dominate the Bull Run, According to Experts
- What if the Altcoin Season is Absent in This Cycle? A Theory That Worries Investors
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