Is the Worst Yet to Come for Crypto?
From a technical perspective, the market is officially rolling into the second quarter. To see where it’s going, though, we need to check where it’s been. The first quarter ended with the total cryptocurrency market capitalization falling by almost 21%, reducing losses by around 24% from the fourth quarter of 2025.
In just six months, crypto has technically lost more than $1.5 trillion. Bitcoin [BTC] has not been spared either, accounting for 60% of these outflows – a sign that it is lagging compared to other volatile assets. Supporting this, the
In short, despite recent optimism about Bitcoin’s ‘relative’ resilience, the first quarter showed that crypto was still the weakest performer across all asset classes. Against this backdrop, a recent message from US President Donald Trump could not have come at a more critical time.
In it, President Trump warned of a possible serious attack on Iranian infrastructure, putting expectations of a ceasefire on hold. But more than the content, it is the “timing” of the message that has caused an outright market frenzy. Notably, the US stock market will remain closed this weekend, meaning the postal service has temporarily prevented a liquidation cascade.
However, the real momentum shift is in oil prices. Even before the post, oil had roiled global markets. Now the added geopolitical risks are creating more uncertainty. Traders and investors are likely to react once the market reopens, making Monday a highly volatile session for stocks. However, the spotlight falls on crypto: is there a huge bloodbath looming?
Crypto is stuck in a liquidity trap as market risk increases over the weekend
The nearly 21% decline in the crypto market in the first quarter almost parallels oil prices.
This trend will particularly define Monday’s market, especially now that stocks are likely to react. Take the NASDAQ (NDX), for example: it ended the first quarter down almost 6%, marking its worst quarterly performance since the first quarter of 2025.
The culprit here is the ongoing conflict in the Middle East, which has put enormous pressure on oil supplies. The Strait of Hormuz, responsible for roughly 20% of global oil exports, remains critically endangered. The impact is clear: Oil closed the first quarter down nearly 70%, sending ripples across risky assets including crypto.
According to AMBCrypto, that’s where President Trump’s recent post comes into play. Now that the escalation is official, analysts expect oil prices to rise towards $200 per barrel. In this context, Monday’s market reaction could be crucial, with the likelihood of a sharp sell-off looking high.
In the meantime, Bitcoin’s positioning index reversed negatively, indicating that shorts are returning. This is not random. Instead, it’s a strategic move by traders, positioning themselves for a potential downside in crypto once Monday’s session begins. With crypto deeply in a liquidity trap, even a small move can trigger sharp price swings, making the market extra sensitive to any catalyst.
Against this backdrop, President Trump’s post is now a major bearish trigger. Once Monday’s session begins, stocks will react, putting crypto at high risk of a liquidation-induced bloodbath.
Final summary
- Losses in the first quarter, negative positioning and a liquidity trap are the basis for sharp downward movements.
- President Trump’s post and rising oil prices could trigger a major market reaction on Monday.