Bitcoin Faces Worst Q1 Since 2020 Amid Trump’s 100 Days

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Disappointing Q1 Performance

With just over a week to go until the end of March, the first quarter has been disappointing, particularly in terms of price action rather than narrative for the crypto industry. Bitcoin (BTC) has dropped 10%, marking its worst first-quarter performance since 2020, while ether (ETH) has posted its weakest first quarter since its inception. So far, Bitcoin has been relatively steady in March, but the overall sentiment remains cautious.

Market Volatility and Trump’s 100 Days

Markets remain in the latter stages of President Donald Trump’s first 100 days in office, a period historically marked by uncertainty and volatility. This uncertainty is expected to persist at least through the end of April. As the quarter-end approaches, negative liquidity and position management could lead to increased volatility and whipsaw price action, according to the founders of a trading newsletter.

Despite the short-term weakness, the pair maintain a bullish outlook heading into the second quarter. A slightly more dovish tone from the Federal Reserve at its March meeting — even without actual rate cuts — combined with a weakening U.S. dollar, increased fiscal spending in the European Union, and a U.S. economy that is slowing but not collapsing, are all factors they say will support a strong three months ahead.

Market Insights and Expert Opinions

“Market participants were hoping for a tax-free capital gains framework or a Bitcoin national reserve accumulation plan,” noted Blockhead Research Network (BRN). “Instead, Trump reiterated his general support for the crypto industry, highlighting the role of stablecoins in maintaining the U.S. dollar’s dominance in global trade. While supportive in the long term, the lack of immediate policy commitments is a short-term bearish signal.”

“Despite near-term weakness, we recommend staying heavily invested, as the market could react swiftly to the next positive development. Support levels are not far from current prices,” BRN told CoinDesk in an email.

Expert Analysis from CoinDesk

Stay alert! James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.

In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin, MicroStrategy (MSTR), and Semler Scientific (SMLR).

Team Insights from Asia

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia, focusing on crypto derivatives, DeFi, market microstructure, and protocol analysis. Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, and other cryptocurrencies.

Looking Ahead

As we move closer to the end of the first quarter, investors and market participants are urged to stay informed and prepared for potential market shifts. The upcoming weeks could bring new developments that may significantly impact the crypto landscape. Keeping an eye on economic indicators, regulatory changes, and market sentiment will be crucial for navigating this volatile environment.

In conclusion, while Bitcoin is facing its worst first quarter since 2020, the outlook for the second quarter remains cautiously optimistic. With the right strategies and insights, investors can position themselves to take advantage of potential opportunities in the ever-evolving crypto market.