Crypto analyst warns of extended market uncertainty
Analyst warns of months-long crypto market recovery
Popular crypto trader and analyst Matthew Hyland suggests that the digital asset market may take at least two months to recover following a major liquidation event triggered by U.S. President Donald Trump’s tariff threats.
Key takeaways:
- Analyst Matthew Hyland predicts that the crypto market may need at least two months to recover after the largest liquidation event.
- The February 3 crash wiped out over $2.24 billion, with Bybit estimating losses of up to $10 billion.
- The drop was driven by Trump’s announcement of 25% tariffs on imports from Canada, Mexico, and China.
- Hyland warns that a rapid recovery in the crypto market is unlikely.
“You probably won’t see December highs for most altcoins for at least two months, if not longer, so keep expectations moderate and just be patient,” Hyland wrote on his X page.
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Historic liquidation event shakes crypto markets
On February 3, the crypto market experienced what analysts are calling the largest liquidation event in history, with over $2.24 billion in traders’ positions wiped out within 24 hours. Some industry insiders suggest the real figure could be much higher. Bybit co-founder and CEO Ben Zhou estimated the total liquidations to be between $8 billion and $10 billion, according to Cointelegraph.
This market turmoil was primarily driven by growing concerns over a global trade war after Trump announced a 25% tariff on imports from Canada, Mexico, and China, along with a potential 10% tariff on European goods. While the planned tariffs on Canada and Mexico were later postponed following negotiations, the initial announcement sent shockwaves through financial markets, particularly in the crypto space.
Crypto market crash
Following the February 3 crash, when Bitcoin (BTC) plummeted below $93,000 and several altcoins lost between 20% and 30% of their value, many digital assets have struggled to regain their previous levels. As of now, BTC is trading at $98,150, still below the critical psychological threshold of $100,000.
Cryptocurrency prices by market capitalization. Source: CoinGecko
Recovery likely to take months
Hyland pointed to historical precedents, noting that similar large-scale crashes in 2020 and 2022 took over two months to recover. He referenced the March 2020 crash triggered by the COVID-19 pandemic when Bitcoin lost 47% of its value in a single day and required months to fully recover.
Similarly, the collapse of Terra (LUNA) in May 2022 and the FTX exchange crash in November 2022 led to prolonged downturns, followed by months of consolidation before the market stabilized.
Although a sharp “V-shaped” recovery remains possible, Hyland warned that past instances of rapid rebounds, such as the pandemic-driven 2020 recovery, still involved multiple corrections along the way.
Market uncertainty persists
Given the scale of recent liquidations and ongoing economic uncertainty, Hyland advised traders to manage their expectations and prepare for a slow recovery. “Assuming an immediate recovery within days is simply unlikely,” he stated, cautioning that an overly optimistic outlook could lead to disappointment.
As Bitcoin and other cryptocurrencies attempt to stabilize, traders remain vigilant, looking for signs of market consolidation and potential recovery in the coming months.
