Total chaos in the crypto market: Traders are lost!

The crypto market is going through an unusual period of turbulence, even perplexing the most experienced traders. Despite favorable conditions and the support shown by the U.S. government, cryptocurrencies struggle to maintain their upward momentum, creating a paradox that destabilizes investors.

The crypto market no longer reacts as it used to

On February 4, several influential traders expressed their confusion over the movements in the crypto market on X.

Trader Sykodelic described the market as “completely cooked”, noting that despite the favorable measures from the U.S. government and President Donald Trump, prices continue to fall.

According to The Bitcoin Therapist, bitcoin is significantly undervalued by $50,000 to $100,000, despite numerous positive signals.

“Something is wrong with the pricing of bitcoin. We are undervalued by at least $50,000 to $100,000. There are too many reasons to be optimistic. A violent revaluation is to be expected.”

The Crypto Fear & Greed Index, which measures market sentiment, illustrates this confusion with a sharp drop of 18 points in one day, going from 72 (euphoria) to 54 (neutral) on February 5.

The paradox is all the more striking as by the end of 2024, experts agreed on a rise in bitcoin for early 2025, fueled by Trump’s election and the hypothesis of a bitcoin as a U.S. national reserve.

Macroeconomic events disrupt predictions

Although bitcoin reached a new historic peak exceeding $109,000 during Trump’s inauguration on January 20, the market has since experienced increased volatility. The trade tensions initiated by Trump’s new customs policies triggered the “largest liquidation event in crypto history” on February 3, with more than $2.24 billion liquidated in 24 hours.

Despite the subsequent suspension of planned tariffs for Canada and Mexico, bitcoin struggles to maintain the psychological threshold of $100,000, currently trading around $97,925.

The dominance of bitcoin in the market, however, continues to progress, reaching 61.47%, exceeding analysts’ forecasts who anticipated the onset of an altcoin season.

In light of this unusual situation, Michaël van de Poppe, founder of MN Capital, remains optimistic, stating that despite expectations of an imminent market peak, “this is literally just the beginning”. Meanwhile, Eric Trump, one of U.S. President Donald Trump’s sons, publicly encouraged the purchase of Ethereum on his X account yesterday, following a surprising tweet that captured major investor attention.