In 2025, the cryptocurrency market faced significant turmoil, experiencing two major crashes that contradicted the prevailing bullish sentiment. The first crash began in the first quarter and extended into early April, leading to a steep liquidity crisis. The total market capitalization of cryptocurrencies plummeted from approximately $3.6 trillion in mid-January to around $2.42 trillion by April 9, representing a staggering loss of roughly $1.24 trillion.
This downturn was primarily influenced by macroeconomic factors rather than specific cryptocurrency news. The escalation of the tariff wars initiated by the Trump administration caused investors to withdraw from riskier assets in anticipation of potential losses.
Following this initial crash, the market exhibited a robust recovery from April until August, fueled by President Trump”s announcement of a pause in the tariff conflicts. This announcement catalyzed a significant influx of liquidity, propelling key cryptocurrencies such as Bitcoin and Ethereum to reach new all-time highs.
However, the optimism was short-lived as the threat of renewed tariff wars emerged in August, triggering volatility and concerns of a potential double top formation. Analysts noted striking similarities between the current market conditions and those of 2021. Concurrently, long-term holders began liquidating substantial portions of their crypto assets, further exacerbating market pressures.
The second major crash occurred from October 7 to November 22, when the total market cap fell from an all-time high of $4.28 trillion to approximately $2.89 trillion, marking a decline of $1.39 trillion in a notably shorter time frame.
In the fourth quarter, macroeconomic factors continued to dominate discussions surrounding the cryptocurrency market. Despite a backdrop of bullish sentiment earlier in the year, investors were cautious due to persistent inflation and rising unemployment rates in the U.S., alongside the Bank of Japan”s impending rate hike announcements. Many analysts warned that these conditions posed systemic threats to global financial stability, leading investors to retreat from the market.
This scenario unfolded as the super cycle theory gained traction, suggesting an uninterrupted upward trend in market conditions. However, the actual market dynamics reflected a reversion to the traditional four-year cycle patterns, reaffirming historical trends in cryptocurrency trading.
