Bitcoin (BTC) recently slipped below the $84,000 mark, following a hot U.S. inflation report that raised concerns among traders. The decline coincided with a 2% drop in Nasdaq, highlighting the broader market’s vulnerability. Amid growing macro uncertainty and impending tariffs from President Donald Trump, analysts are now issuing cautionary predictions for Bitcoin’s performance in the second quarter of 2025.

Bitcoin’s Recent Price Action and Inflation Data

Bitcoin’s price faced significant pressure after a hotter-than-expected PCE (Personal Consumption Expenditures) inflation print on Friday morning. The inflation data showed higher-than-anticipated price increases, reigniting fears of prolonged economic uncertainty. As a result, Bitcoin fell below $84,000, putting it on the defensive after a recent run-up. While the crypto market has historically shown resilience, the latest inflation report has shifted investor sentiment, leading to a more cautious outlook for Bitcoin.

The downward price action mirrored the broader risk-off sentiment in the market, as gold prices hit new highs while stocks, particularly in the tech sector, struggled. The upcoming trade tariffs set to be implemented by President Trump have also added to market uncertainty, contributing to Bitcoin’s inability to maintain upward momentum. Coinbase analysts predict that Bitcoin’s price could remain range-bound between $78,000 and $88,000 until early April, specifically until the April 2 deadline for Trump’s tariffs.

Analyst Warnings and Range-Bound Expectations

Coinbase analysts issued a warning regarding Bitcoin’s potential for range-bound trading in Q2 2025. While they predict Bitcoin’s price will likely oscillate between $78,000 and $88,000 over the next few weeks, they also caution that the upcoming months—particularly from April to June—have historically been challenging for the cryptocurrency market. Analysts suggested that traders should reduce their exposure to Bitcoin during this period due to the heightened risk of volatility.

Adding to the cautious sentiment are the difficulties facing short-term holders (STH). These are investors who bought Bitcoin in the past six months and are now facing considerable losses due to Bitcoin’s decline from its 2025 highs. According to Glassnode, the volume of Bitcoin held by short-term holders in a loss has surged to 3.4 million BTC, the highest level seen since 2018. The financial distress among new investors is raising concerns about a potential market-wide capitulation event, which could further weigh on Bitcoin’s price.

Bearish Sentiment and Increased Hedging Activity

As Bitcoin’s price continues to struggle, there is increasing evidence of bearish sentiment. The options market reflects this, with a negative risk reversal (25RR) indicator showing that traders are hedging their positions against further downside risk. Amberdata’s data revealed that options expiries for April 4 and April 11 showed a negative 25RR value, signaling that more investors are betting on Bitcoin’s price continuing to decline.

Despite these bearish signals, Bitcoin’s long-term market structure remains bullish. On the weekly price chart, Bitcoin is holding steady above the 50-EMA (Exponential Moving Average), a key support level that has marked previous bull runs. This dynamic level, which has supported Bitcoin during previous bull markets in 2021 and 2023, continues to provide a solid foundation for Bitcoin’s price in the current cycle. If Bitcoin manages to hold above this 50-EMA, the long-term bullish trend remains intact.

Key Levels to Watch in Q2

The 50-EMA on the weekly chart is a crucial level for Bitcoin moving forward. A sustained break below this level could signal a shift into a bearish trend, raising the likelihood of a more substantial market correction. Traders will be closely monitoring this level to determine Bitcoin’s trajectory in Q2.

As Bitcoin continues to navigate macroeconomic challenges, the next few weeks will be pivotal for its short-term outlook. Investors and traders should remain cautious, particularly with the risk of additional sell-offs in the options market. However, if Bitcoin manages to hold above its key support levels and recapture the $88,000 mark, the long-term outlook could remain favorable.

In conclusion, while Bitcoin’s market structure remains bullish, the uncertainty surrounding inflation, tariffs, and macro conditions suggests that Q2 2025 could bring more volatility. Investors will need to stay alert and adjust their strategies as Bitcoin’s price action unfolds in the coming weeks.