Macro crypto currency market outlook

Bitcoin has seen a healthy recovery out from the yearly low as the market tries to find that next higher low ahead of a bullish continuation. However, we will need to see a bigger push back above the $95k area to suggest the uptrend is back on track. Until then, risk remains for a deeper setback towards major previous resistance turned support in the form of a previous record high from 2024 in the $74k area. 

It’s been a challenging period for cryptocurrencies, with bitcoin and ether experiencing their weakest quarterly performance since 2018. In Q1, bitcoin declined by 12%, while ether faced a more substantial drop of 42%. We attribute this initial weakness to a “sell-the-fact” reaction following the market’s peak optimism after the US election results in November 2024. Subsequently, macroeconomic headwinds triggered another intense wave of selling pressure, as crypto assets struggled to withstand the strain from geopolitical tensions and trade tariff concerns.

Looking forward, we anticipate a significantly more positive outlook for the second quarter and the remainder of 2025. The magnitude of the recent pullback has piqued the interest of medium and long-term investors, who see an appealing opportunity to buy at lower prices. Furthermore, we expect a new surge of institutional adoption to drive increased demand in the coming months.

On the policy front, we anticipate clearer US regulatory guidelines and a shift in the Federal Reserve’s monetary stance towards a more accommodating approach, aligning with investor sentiment. Additionally, we foresee a reduction in tensions surrounding US trade policy, which should stimulate a resurgence in demand for risk assets.

From a seasonal perspective, historical trends bode well for bitcoin and ether in the second quarter. Over this period, bitcoin has typically delivered returns of 25%, while ether has demonstrated even more remarkable performance, surpassing 60% gains. With these factors in mind, we remain optimistic about the potential for a robust recovery and growth in the cryptocurrency market throughout the rest of 2025.