Bitcoin News (March 12, 2025) – Is Bitcoin Headed for a 2018-Style Crash? Key Indicators to Watch

Bitcoin News (March 12, 2025) – Bitcoin’s 22% Decline: A Warning Sign of a Deeper Market Correction?

Bitcoin News (March 12, 2025) – Less than three months into Donald Trump’s second term, market volatility has surged to unprecedented levels, with Bitcoin (BTC) dropping 22% from its all-time high of $109,000. This decline mirrors similar corrections seen during the 2016-2017 bull run. Despite a 122.8% annual return in that cycle, Bitcoin ended Q1 2017 down 4%, showing similar market turbulence. However, this year’s deeper decline raises questions about a potential 2018-style crash.

2018 Macro Conditions and Bitcoin’s 72% Crash

In 2018, Bitcoin experienced a 72% crash, bottoming out at $3,740.50 by the end of the year. The macroeconomic environment at that time closely resembles current conditions, particularly Trump’s trade war with China and rising tariffs. By mid-Q2 2018, inflation hit a two-year high of 2.9%, resulting in a 40% quarterly decline for Bitcoin.

Today, we see similar macro pressures, with the U.S. government facing over $7 trillion in debt refinancing. Investors are shifting to safe-haven assets like bonds, as indicated by the 10-year treasury yield, which has recently dropped to a two-month low. If this trend persists, Bitcoin and the broader crypto market could face further downside risk, mirroring the 2018 crash.

On-Chain Indicators Signal Bitcoin Capitulation Risk

Recent on-chain data from Glassnode shows a significant shift in Bitcoin’s market structure, moving from accumulation to distribution. The Accumulation Trend Score remains near 0.1, reflecting consistent sell pressure since January. The Cost Basis Distribution (CBD) heatmap shows a decline in buy-the-dip activity below $92,000, indicating weaker demand for accumulation.

Additionally, the Short-Term Holders (STHs) are showing signs of capitulation, with the STH Spent Output Profit Ratio (STH-SOPR) remaining below 1, meaning many investors are selling at a loss. These signs, along with prevailing macroeconomic challenges, suggest an elevated risk of further corrections before a strong support level is established. This scenario mirrors the extended distribution phase that led to Bitcoin’s 2018 crash.

In conclusion, Bitcoin faces heightened risk as it navigates through volatile macroeconomic conditions, with the potential for a further market correction similar to what occurred in 2018.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.