Crypto Déjà Vu: Bull market’s last dance or just getting started?

Bitcoin (BTC), Ethereum (ETH), and the entire crypto market just took another punch as fears of a broader market downturn rattled investors. BTC fell over 3% to revisit the $76,000 mark. Similarly, ETH plunged by over 8% to hit the $1,700 zone, a level not seen since October 2023. The investors’ sentiment has now entered the “extreme fear” territory. 

The cumulative digital assets market cap declined by around 4% in the last 24 hours to stand at $2.64 trillion. This dip comes in as the Nasdaq 100 suffered its worst single-day drop since 2022. The index plunged by around 3.8% after US President Donald Trump warned of economic turbulence from trade wars with Canada, Mexico, and China.

Charts suggest that the market hype is fading, and liquidity is tightening up. It seems like the retail traders have realized that the game ahead might be rigged.

Crypto’s boom and bust cycle is back

10x Research in a report mentioned that there are several noticeable parallels emerging between the end of the last crypto bull market and the ongoing one. Every cycle sees many loud voices promising unlimited upside while the market print pumps. However, when things go south, the rhetoric quickly changes to volatility being a part of the game and investor patience. 

Investors have seen this movie before. In past cycles, hedge funds exploited the gap between DeFi and TradFi rates. Meanwhile, the game has now shifted to Bitcoin spots vs. future arbitrage. Tactics might have changed, but strategy remains the same. Such voices will extract maximum yield when the retail traders get rekt.

It added that the market situation right now is turning out to be a macro Déjà Vu. The Fed had turned hawkish near Bitcoin’s peak in both 2017 and 2021. The same pattern is unfolding as the market hype is fading. BTC price is down by almost 13% on the year to date (YTD) and struggling to keep up despite recent bullish announcements.

Despite the declaration of a crypto-linked strategic reserve, Bitcoin price dropped by 16% in the past 30 days. BTC is trading at an average price of $81,520 as of press time. It has declined by 25% from its all-time high of over $109K, recorded on January 20, 2025.

In a similar fashion, Ripple’s XRP surged to become the second-largest crypto by market cap in 2017, only to fade by 2021. XRP saw a major price spike when the Securities and Exchange Commission (SEC) led lawsuit turned out to be partially in its favor. Since then, it has been juggling pumps and minor dumps. XRP price is down by 10% in the past 7 days, trading at an average price of $2.13.

The largest altcoin has also endured its most devastating performance over the last bull runs. Ethereum price is down by 43% YTD. ETH has been bleeding out, leaving investors in a panic. ETH is trading at an average price of $1,919 as of press time.

Trump’s crypto magic fading?

For most of the months, Trump’s pro-crypto stance was a key driver behind Bitcoin’s massive rally to knock off fresh ATHs. On-chain data shows that whale accumulated and new BTC wallet creation exploded after his November 5 election win.

Fast-forward to today, that excitement is getting a reality check. Despite Trump’s executive order to create a Bitcoin Reserve and Digital Asset Stockpile, the lack of active government BTC purchases has left the market unimpressed. Even last week’s White House Crypto Summit announcement did little to boost sentiment.

The crypto market is now on a 7-week downtrend, but history shows this sector is built on boom-and-bust cycles. The question here remains, was Trump’s election the last major catalyst? Or are we just stuck in crypto Déjà Vu?

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now