Bitcoin’s price has been on a downward trend recently, despite the broader crypto market showing signs of recovery. Currently trading at around $84,000, Bitcoin has been undergoing a period of correction alongside the general decline in the cryptocurrency market. This has raised concerns among investors about whether the recent market rebound can be sustained, especially in the face of ongoing economic uncertainties and trade war fears.

A Mild Correction in the Market

While the cryptocurrency market has experienced significant volatility, market analyst Timothy Peterson suggests that Bitcoin’s recent price drop is relatively mild compared to past bear markets. In his analysis of ten previous bear markets, Peterson notes that only four were worse in terms of duration—2018, 2021, 2022, and the current one in 2024.

Peterson defines a bear market as a 20% drop from an all-time high. The current pullback in Bitcoin’s price is smaller in magnitude than previous declines and is expected to last only 90 days. Despite the short-term downturn, Peterson remains optimistic about Bitcoin’s long-term prospects, citing strong adoption trends as a sign that a drastic decline below $50,000 is unlikely.

He also predicts that Bitcoin could see a slide in price over the next month, followed by a potential 20-40% rally after mid-April. This rally could reignite investor interest and drive Bitcoin to new highs.

Trade War Concerns Impact Investor Sentiment

One of the significant factors contributing to Bitcoin’s price drop is the ongoing trade tensions between the U.S. and its trading partners. U.S. President Donald Trump’s recent decision to impose tariffs on several countries has led to retaliatory measures, fueling fears of a prolonged trade war. As a result, investors are pulling away from riskier assets like cryptocurrencies, which are particularly sensitive to macroeconomic conditions.

The uncertainty surrounding the global trade landscape has caused a shift in investor sentiment, with many turning to safer assets. This has placed further pressure on Bitcoin’s price, which has reacted negatively alongside other risk assets, including stocks and commodities.

Decline in Speculative Trading

In addition to macroeconomic factors, a key indicator of market sentiment is the decline in speculative trading, which typically drives short-term price movements. Data from Glassnode’s Hot Supply metric, which tracks Bitcoin held for a week or less, shows a sharp decrease from 5.9% in November 2024 to 2.3% in March 2025. This indicates that fewer traders are actively speculating on short-term price movements, signaling a reduction in market enthusiasm.

This decrease in speculative trading is a reflection of weaker market sentiment and suggests that many investors are taking a more cautious approach amid the current market conditions.

Retail Traders’ Limited Impact on Price Growth

Another factor contributing to the price stagnation is the lack of fresh retail investment. According to CryptoQuant, a large portion of retail traders are already heavily invested in Bitcoin. This limits the potential for a sudden influx of capital that could drive Bitcoin’s price higher. Without new retail investors entering the market, Bitcoin may struggle to break through key resistance levels in the short term.

Moreover, the narrative of Bitcoin as a safe-haven asset is being tested. Traditionally, Bitcoin has been viewed as a hedge against economic uncertainty, but its price has fallen in response to the recent trade war news, behaving similarly to other risk assets. This undermines its status as a reliable store of value in times of geopolitical or economic instability.

Regulatory Challenges and Future Outlook

Bitcoin is also facing significant regulatory hurdles that could weigh on its price in the coming years. Experts predict that U.S. crypto banking restrictions, which have already created uncertainty in the market, may last until at least January 2026. These regulatory challenges, combined with the lack of clear guidance from governments, contribute to the cautious market environment.

Despite these obstacles, Peterson remains confident in Bitcoin’s long-term potential, as global adoption trends continue to grow. The cryptocurrency’s ability to withstand short-term market fluctuations and emerge stronger over time is what many long-term investors are betting on.

Conclusion

Bitcoin’s price drop amid the market rebound highlights the complex relationship between macroeconomic factors, investor sentiment, and regulatory developments. While the current market correction is mild compared to previous bear markets, Bitcoin’s price faces significant pressure from trade war fears, weak speculative trading, and the lack of new retail investment. However, analysts remain optimistic that the market will stabilize in the coming months, with potential for a price rally after mid-April. For now, Bitcoin’s ability to weather short-term volatility and maintain its long-term growth trajectory will be key to its future success.