The cryptocurrency market experienced a significant downturn following the imposition of new tariffs by then-US President Donald Trump on China, Canada
Cryptocurrency markets took a hit following the announcement of new tariffs on China, Canada, and Mexico by then-US President Donald Trump. This volatility affected both Bitcoin (BTC) and altcoins, with BTC dropping to $91,000 and altcoins, such as Ethereum (ETH), Dogecoin (DOGE), and XRP, experiencing even steeper declines. This market correction sparked concern among investors over the potential for recovery.
Crypto analyst Matthew Hyland shared his perspective on the situation, suggesting a more measured outlook for altcoin recovery. In a post on X (formerly Twitter), Hyland proposed that a return to the December highs for altcoins might not occur until April or even later. He attributed this slower projected recovery, in part, to the announcement of Trump’s tariffs.
Drawing parallels to previous market downturns in 2020 and 2022, Hyland highlighted that rapid, V-shaped recoveries are uncommon. He urged investors to temper their expectations, considering that the recovery process could be gradual, potentially spanning over months. Hyland cautioned against expecting a quick market turnaround, as such optimism could lead to further sell-offs, ultimately worsening and prolonging the recovery period.
Hyland's analysis placed the recent market downturn within a broader historical context. He highlighted significant events, such as the largest liquidation event in cryptocurrency history on February 3, 2025, which could indicate a potential bottom. However, he noted that, based on market downturns in 2020 and 2022, full recoveries spanned over two months. This historical perspective informed his cautious outlook, emphasizing the need for patience and realistic expectations. He highlighted that achieving the previous December highs for altcoins would likely take a considerable amount of time, urging investors to prepare for a prolonged recovery period.
The analyst further elaborated on the reasons for his cautious projection. He explained that the psychological impact of unrealistically high expectations could lead to early sell-offs by investors who become anxious when the market fails to rebound quickly. This selling pressure could create a negative feedback loop, further delaying the recovery. He compared the current situation to previous market crashes triggered by events like the COVID-19 pandemic, the collapse of the Terra Luna stablecoin, and the bankruptcy of the FTX exchange, each of which resulted in recoveries that spanned over months.
Hyland reinforced his argument by highlighting the psychological factors at play. Anticipating a swift recovery can lead to disappointment and panic selling when the market fails to meet these expectations, creating a cycle that prolongs the recovery period. He acknowledged that, while markets are unpredictable and rapid recoveries are possible, they are statistically less likely. He stressed the importance of managing expectations, advising against assuming a rapid V-shaped recovery, like the limited recovery seen in 2020, which still occurred over weeks with multiple dips.
In conclusion, Hyland's analysis offered a cautious perspective on the cryptocurrency market's recovery prospects following the tariff-induced downturn. He highlighted the need for patience and realistic expectations, drawing on historical data and psychological factors to support his argument. He cautioned against anticipating a rapid rebound and suggested that a full recovery, particularly for altcoins, could take months, mirroring the timelines observed in previous market corrections. His central message was one of tempered optimism, acknowledging the potential for recovery while emphasizing the importance of managing expectations and avoiding impulsive reactions driven by short-term market fluctuations. He reminded investors that markets are inherently unpredictable, but historical trends suggest that significant downturns require time to fully recover.
