As the risk of tariff-related uncertainty persists into the second quarter, the crypto market could face another dip following the recent correction in March, analysts at Nansen say.

As the industry heads into April, Bitcoin (BTC) and the wider crypto market could be staring down another dip as uncertainty surrounding tariffs and U.S. trade policy

As the threat of tariffs continues to recede and the U.S. macro environment shows signs of stability, the crypto market could be setting up for another dip before April 2, according to Nansen.

This downturn follows the recent correction in mid-March, which saw Bitcoin (BTC) and other major coins experience a swift decline from the March 1 lows.

According to Nansen’s analysts, there’s a 70% chance that the market may encounter another price adjustment in the weeks after April 2.

After this second correction, they anticipate the market to stabilize and set the stage for sustained growth throughout the remainder of the year, ultimately paving the way for a return to all-time highs.

“In my main scenario, 70% subjective likelihood, I expect another leg down in crypto prices after April 2 after we reached a local bottom in mid-March. After this second correction, I expect we will be bottoming for the rest of the year (continuation of the bull market and revisit of the ATHs for BTC). ”

However, in a scenario with a 30% subjective likelihood, they believe that the market has already bottomed and suggest that a return to the 2022 lows is possible in the event of a recession.

“For the remaining 30%: it would be if we have already bottomed or if this is just a dead cat bounce for U.S. equities and crypto (in case of a recession, which is not my base case, I think the U.S. is just slowing from 3% to 1.5-2% growth).”

This period of uncertainty has been largely driven by the tariff situation, which has seen the U.S. policy uncertainty index hit new highs.

With the U.S. administration engaging in trade discussions with several countries, including China, and expressing concerns over tariffs, this has become a key source of investor unease.

According to Nansen, the uncertainty is expected to peak soon as Treasury Secretary Bessent recently pointed out that many of the U.S.’s trading partners are now negotiating to reduce their own trade barriers, helping to ease some concerns.

Even President Donald Trump has hinted at potential tariff “exemptions” in specific instances.

While these talks may ultimately benefit the U.S. with long-term growth, Nansen believes that the uncertainty will likely linger well into the second quarter.

“Right now, I think that we are experiencing corrections within a crypto bull market. Why I see this as a bull market still: 1) Ongoing progress on crypto regulation and crypto institutionalization in the U.S., and 2) U.S. real growth has slowed but is not flashing ‘recession.’ Of course, this is my only main scenario, and I will continue to watch data and markets for signs that this is the correct reading.”

According to Nansen, there’s a 50/50 chance that the peak of trade policy uncertainty has passed.

The true impact of these tariff negotiations might not be fully clear until mid-year.

However, the researchers believe that this peak uncertainty is more likely to fall between April and June, especially with the start of U.S. tax cut package discussions.

This uncertainty could trigger another short-term correction in both Bitcoin and U.S. equities, according to their analysis.

No evidence of recession yet

Despite this downturn, there are signs of optimism as technicals are showing encouraging signs.

The recent dip is being absorbed by buyers, evident in both BTC and U.S. equities, and the lack of sellers is pushing prices up again.

Furthermore, the researchers highlight that Bitcoin ETFs saw seven days of net inflows, a trend not seen since crypto prices peaked earlier this year.

One way or another, it’s clear that the market remains cautious as a lot of people are questioning whether the crypto bull run is still going strong or if we’re getting close to a peak.

If history is any indication, times of economic uncertainty have often lined up with market downturns, making investors even more cautious.

After market sentiment hit extreme fear last week, with some investment banks raising the U.S. recession probability to 40% for this year, hard economic data has eased these concerns.

The latest U.S. March flash PMI report shows a 53.5 score, the highest in three months, suggesting a 1.9% annual growth rate. However, the growth for the whole quarter is lower at 1.5% due to weaker data in January and February.

Most importantly, there is still no evidence of a recession at this stage, and most of the data weakness has been in sentiment indicators, while hard economic data has held up.

At present, there is no evidence of a transition into a bear market.