The recent Bitcoin decline has aligned with a drop for the S&P 500, but CryptoQuant shows that historical data promises imminent recovery.
A recent report from the market analytics platform confirms that Bitcoin’s recent downturn has mirrored the stock market’s struggles.
Bitcoin Trails S&P 500 Decline but Rebound Remains Imminent
According to CryptoQuant, since the start of former President Donald Trump’s second term last November, the S&P 500 has declined by 9%, marking the worst start to a presidency since 2009.
How is the market reacting to Trump’s second term?
Since his return, the S&P 500 has fallen 9%, marking the worst start to a presidency since 2009.
Back then, a recession drove the drop. This time, uncertainty is in the driver’s seat.
Let's dive into the data 🧵👇 pic.twitter.com/A10F0qtweB
— CryptoQuant.com (@cryptoquant_com) March 12, 2025
While the previous decline stemmed from the Great Financial Crisis, the CryptoQuant analysis notes that this time, uncertainty is the primary factor driving the market slump.
However, historical data suggests that despite these downturns, the S&P 500 has always recovered over time. Major historical crashes like the Dot-Com Bubble (2000-2002), the Great Financial Crisis (2007-2009), and the COVID-19 Crash (2020) all resulted in massive dips, but the long-term trend has always remained bullish.
The post-2009 bull run, fueled by Federal Reserve policies and technological advancements, saw the S&P 500 reach new highs until early 2022. However, volatility returned with inflation concerns and interest rate hikes.
CryptoQuant stressed that Bitcoin, which has often been viewed as a hedge against traditional financial markets, continues to behave like a risk asset, following the S&P 500’s trajectory. Bloomberg ETF expert Eric Balchunas recently defended the asset as it takes this bearish journey.
Even after the announcement of a Strategic Bitcoin Reserve (SBR), the asset has failed to maintain bullish momentum. Initial surges in asset prices following the announcement have been erased, showing how market uncertainty still weighs heavily on crypto.
Despite this, the likelihood of a recovery for Bitcoin and the rest of the crypto market is still high, drawing from historical data. This is especially true if BTC continues to trail the S&P 500’s trajectory for when the index witnesses the much-anticipated rebound.
Analysts Confirm Upcoming Recovery
Meanwhile, amid the market struggles, prominent crypto trader Awawat recently compared Bitcoin’s current situation to the mid-cycle correction of 2021.
・pretty high conviction we're here, replicating similar conditions to the mid-cycle cooldown of '21
・price broke down from the top distribution range and a lot of rebuilding and healing needs to happen (it takes time)
・back then we were pocket-watching the Bitfinex whale… pic.twitter.com/ttN7V25O7X— Awawat (@Awawat_Trades) March 12, 2025
Notably, during that period, Bitcoin dropped from $59,000 to around $30,000 before rebounding to an all-time high in November of the same year. He noted that BTC has now fallen from its previous high range and will require time to rebuild its market structure.
Awawat also pointed out that while traders in 2021 were closely watching the moves of a major whale on Bitfinex, today’s market participants are keeping an eye on aggressive leveraged traders on platforms like Hyperliquid.
He believes that both overly bullish and bearish targets will likely be inaccurate, and instead, Bitcoin will experience volatile sideways price action before any clear trend emerges.
Similarly, Altcoin Sherpa expressed hope that Bitcoin has already hit its relative bottom, similar to the situation in May 2021.
However, he cautioned that the overall market structure does not look particularly strong on higher timeframes, indicating that Bitcoin may need more time before any significant recovery takes place.
Potential Bitcoin Upside Scenarios
Meanwhile, analyst Justin Bennett observed that Bitcoin recently reclaimed the $81,500 level and successfully retested it. Currently, BTC trades for $81,307, having faced resistance at the $84,437 mark following an earlier rebound.
Nice reclaim of $BTC $81,500 + retest.
US CPI came in lower than forecast after some hot January numbers, so most likely some relief from risk assets.
I can see $88k and possibly a $92k sweep, but from there, all eyes shift back to the February breakdown I've discussed. pic.twitter.com/gImqIXbVw7
— Justin Bennett (@JustinBennettFX) March 12, 2025
Bennett attributed the bounce to the latest U.S. Consumer Price Index (CPI) report, which showed inflation coming in lower than expected after January’s hotter-than-anticipated numbers. This has provided some relief to risk assets, including Bitcoin.
Bennett outlined potential bullish targets, suggesting that Bitcoin could rally to $88,000 and possibly even $92,000. However, he cautioned that if the price reaches those levels, traders should turn their attention back to February’s breakdown, which remains a major resistance area.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
