The Trump Administration has offered several advantages to the crypto sector in 2025.

The Securities and Exchange Commission (SEC) paused enforcement actions and probes into prominent crypto exchanges and firms like Coinbase, Gemini, Uniswap, OpenSea, ConsenSys, among others.

The Trump Administration has offered several advantages to the crypto sector in 2025.

The Securities and Exchange Commission (SEC) has paused enforcement actions and probes into prominent crypto exchanges and firms like Coinbase, Gemini, Uniswap, OpenSea, ConsenSys, among others. Additionally, the White House has released an Executive Order aimed at fostering American dominance in the digital asset sector and hinted at the possibility of creating a bitcoin reserve.

However, despite these measures, they have not been sufficient to overcome the recent decline in Bitcoin's price and the overall negative mood in the crypto market. Currently valued at $84,000, Bitcoin has decreased by 18% since Donald Trump took office, nearly 23% from its peak, with the wider cryptocurrency market down 21%.

"It seems like all positive developments in crypto are because influential political figures are saying, 'Let's just proceed.' There's no due process, no deep investigation... and this movement can change at any moment. It doesn't seem like there's sustainability," said Kavita Gupta, founder and general partner at Delta Blockchain Fund.

Three main factors driving the market down could lead it to fall further before it finds stability and begins to recover. In fact, the industry might need to wait until 2026 to see any consistent bullish momentum.

Crypto's Self-Inflicted Injuries

There are several reasons to explain the current downturn, with the behaviors of crypto participants being a primary factor.

For example, the industry itself has not helped matters with a series of memecoin controversies like $MELANIA and $LIBRA, which embroiled Argentine President Javier Milei in scandal. Trading activity and new memecoin launches are decreasing across the board, raising doubts about the long-term sustainability of this trend. For instance, the number of new token launches peaked at 66,471 on January 24, just six days after $TRUMP debuted. By February 27, the last day for which full data was available, this number had plummeted to 27,741, a drop of 58%.

"People saw memecoins as the fairest and best way to speculate in crypto, but $LIBRA showed that this notion was flawed. Now, on-chain volumes are significantly lower, and while memecoins bear the brunt, it's impacting the entire crypto landscape," remarked Brian Rudick, head of research at GSR.

Another major blow to the industry was North Korea's $1.5 billion hack of Bybit, marking the largest theft in crypto history, which further raised questions about the security of funds in the crypto space. "These hacks lead outsiders to think that this industry, even after a decade, hasn't matured enough," added Gupta.

External Challenges

The prevailing negative sentiment in the industry has been exacerbated by a decrease in investors' risk appetites.

Normally, consumer optimism rises with a new administration, and business leaders initially welcomed Trump's election due to his pro-business stance. However, several recent indicators suggest that consumer confidence is deteriorating, likely impacted by President Trump's threat of 25% tariffs on trading partners such as China, Canada, Mexico, and the European Union.

The February report from the nonprofit Conference Board’s Consumer Confidence Index showed a decline for the third consecutive month, reporting its lowest levels since August 2021.

These findings align with a University of Michigan consumer sentiment survey that revealed a significant drop in consumer confidence. According to the report, "Consumer sentiment continued its early month decline, falling nearly 10% since January. The decrease was consistent across age, income, and wealth demographics."

Additionally, "Year-ahead inflation expectations rose from 3.3% last month to 4.3% this month, the highest level since November 2023, representing two consecutive months of unusually large increases. The current measure is significantly greater than the 2.3-3.0% range seen in the two years prior to the pandemic."

These inflation expectations, which have surfaced across various age and income categories, are particularly crucial to monitor, as inflation perceptions can become self-fulfilling. Rudick noted, "The last I checked, the CME Fedwatch tool anticipated two rate cuts this year. If those projections are fully retracted due to tariff anxieties, we may see more downsides in traditional markets than in crypto."

How Low Can BTC Go?

Determining where bitcoin might go from here is challenging. Steve Sosnick, chief strategist at Interactive Brokers, emphasized that bitcoin is unique among commodities. "Unlike crude oil, coffee, or cocoa, the supply and demand dynamics for bitcoin are not as clear-cut. It exists mainly for speculation and investment purposes."

However, Sosnick referenced a few technical indicators that could shed light on price levels investors should monitor. One involves bitcoin's 200-day Simple Moving Average. At its current price, the