“If it weren’t for you, I wouldn’t be in this predicament. The pressure you’ve brought on me is unbelievable.” — Robert De Niro portraying Ace Rothstein to Joe Pesci’s Nicky Santoro in Martin Scorsese’s Casino.

Bitcoin enthusiasts may be inclined to hold the broader crypto market accountable for the recent downturn, which saw Bitcoin’s value fall over 20% from its peak of more than $109,000 just five weeks ago, dipping as low as $87,000 earlier this week.

Bitcoin reached that all-time high the day before the presidential inauguration, during a speculative rush fueled by memecoins. This excitement peaked as the Trump campaign decided it was a wise move to introduce tokens linked to both the incoming president and first lady. Initially, these tokens skyrocketed in value but soon plummeted, resulting in substantial losses for all but a select few insiders.

The native token of the Solana blockchain, SOL, which hosted many of these memecoins, has since fallen more than 50%, leading the decline among major cryptocurrencies since that January weekend.

Bitcoin supporters were led to anticipate a Strategic Bitcoin Reserve, only to be presented with TRUMP and MELANIA instead.

Bybit Hack Strikes a Blow

Despite the drastic collapse of memecoins and the ensuing fallout in the overall crypto market over the past few weeks, Bitcoin managed to hover within a relatively tight range, not far from its record high. Just 96 hours ago, the leading cryptocurrency was on an upward trajectory, appearing poised to reclaim the $100,000 threshold.

Then came the Bybit hack.

While Bitcoin advocates were quick to clarify that this security breach had nothing to do with Bitcoin and instead highlighted the vulnerabilities within Ethereum’s framework, the subsequent drop in ETH (down 15% and counting) influenced Bitcoin’s price as well.

Bullish Sentiment Turns Bearish

“We expect this cycle to go well beyond $108,000; it’s hard to believe we could have hit our peak already,” stated StackHodler, a self-proclaimed bitcoin bull, on X this Tuesday. “We should see higher prices in 2025, don’t you think?” He continued, “The truth is, there are no certainties. We’ve just dipped below the short-term holder realized price of $92,000… A fall to the 200-day moving average of around $82,000 could be on the horizon.”

“HOLD OFF on buying the dip for now; a drop into the low $80s is likely,” advised Geoff Kendrick of Standard Chartered, who had previously projected Bitcoin to hit $200,000 by year-end. “Before buying the dip becomes appealing, I anticipate a significant $1 billion ETF outflow day (the current worst being -$583 million).”

Potential Seeds for a Future Bull Run

While traditional markets haven’t been hit as hard as crypto, they too are facing challenges. According to the S&P 500 Index, U.S. stocks experienced their worst week since Trump took office last week. The tech-heavy Nasdaq, which reached its peak in December, now sits 5% below that level.

You can attribute the downturn to various factors: tariffs, the DOGE phenomenon (not the token but the government’s new cost-saving measures led by Musk), or just a general cooling of previously high market enthusiasm. Regardless, interest rate markets are taking note.

The U.S. 10-year Treasury yield has dropped from 4.80% down to 4.32% since Trump’s inauguration. Additionally, expectations for looser Federal Monetary policy have surged as the likelihood of a rate cut in May has more than doubled to 30% in the past week, with the prospect of two rate cuts by June tripling to 15%, according to CME FedWatch.

“The decline in U.S. Treasury yields is a significant long-term advantage for Bitcoin,” Kendrick concluded.