The Bitcoin market has been shaken by a substantial correction, dipping to a low of $76,589 before regaining ground above $80,000 at press time. Even with the recovery, the price remains down 27% from the all-time high of $109,900 reached on January 20. Several high-profile crypto experts have shared their perspectives on the sudden downturn, comparing the current backdrop to the notable price retracements seen in Bitcoin’s history.
Bitcoin Pullback Feels Similar To 2017
Bill Barhydt, founder and CEO of Abra—a global platform for digital asset prime services and wealth management—took to social media to highlight the cyclical nature of Bitcoin corrections. Writing on X, Barhydt stated: “Ya’ll never change. Bitcoin is now experiencing its 11th 25%+ correction in ten years and every time everyone reacts like the sky is falling and every time everyone screams that it’s different this time. This pullback looks, smells and feels 100% just like 2017 to me. Rising fiat liquidity leading to massive asset price gains.”
Barhydt underscored the possibility that supportive monetary and fiscal policies could continue to fuel capital flows into risk assets, noting the US administration has decided to lower treasury rates to refinance debt, lower mortgage rates to unlock the housing and CRE markets and lower treasury rates to save banks from their collective insolvency.
“China is in a deep recession and needs lower US rates to support its own money printing regime. And print they will. We’re likely going to see massive job cuts via government cuts, tech cuts and housing related cuts. At the same time ISM will likely rise for the next several months. All of this tells us liquidity will continue to flow and the markets will do what they always do in this type of cycle. That liquidity will flow into stocks, Bitcoin, crypto and real estate. Once again… buckle up,” Barhydt predicts.
Meanwhile, Cathie Woods, CEO of ARK Invest, struck a similar chord. In her post on X, Woods suggested that market participants may be discounting the concluding phase of a “rolling recession.” She indicated that, in her view, such an environment could create leeway for both the Trump Administration and the Federal Reserve:
“In our view, the market today is discounting the last leg of a rolling recession, which will give the Trump Administration and the Powell Fed many more degrees of freedom than investors expect, setting up the US economy for a deflationary boom in the second half of this year.”
Woods’ analysis aligns with Barhydt’s in expecting policymakers to make use of considerable liquidity levers that, in turn, could boost risk-on assets—including Bitcoin.
Amid the optimistic forecasts, some industry voices remain cautious. Charles Edwards, founder of Capriole Investments, pointed to traditional market indicators such as the S&P 500 and credit spreads as significant gauges for determining whether this is a transient dip or the start of a more entrenched trend.
He posted: “SP500 is crashing. Is this a dip opportunity or the start of something bigger? Sentiment metrics are at extremes which suggest an opportunity, but a number of other metrics are at key inflection points. Importantly, credit spreads and Junk/Treasuries are at key inflection points. When the big dog money moves out of risk to treasuries, you do not want to be exposed. TL;DR: we don’t want Credit Spreads to rally from here.”
Edwards added a note on market dynamics, warning that: “It simply means the market is allocating more to risk-off assets. Markets tend to trend, especially bond markets, so this level would mark the potential start of a new risk-off trend (pending policy action to intervene). Add on the fear/reflexivity dynamic and you tend to see this (and many other) metrics move in waves as panic/fomo sets in.”
At press time, BTC traded at $80,631.
Featured image created with DALL.E, chart from TradingView.com
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