Crypto Market Defies Expectations, Leaving Traders in Disarray

Crypto Market Defies Expectations, Leaving Traders in Disarray

The cryptocurrency market appears to be breaking away from traditional patterns, leaving traders uncertain about what comes next.

“The market is totally cooked,” wrote pseudonymous crypto trader Sykodelic in a Feb. 4 post on X. They noted that despite pro-crypto sentiment from the U.S. government and President Donald Trump, the market “just keeps on retracing.”

“It has lost any sort of rhyme or reason… This is very confusing for almost every investor,” they added.

Similarly, crypto trader The Bitcoin Therapist expressed concerns about Bitcoin’s valuation, stating in a Feb. 4 X post that something is “terribly wrong” with how the market is pricing the leading cryptocurrency.

“We are easily $50K-$100K undervalued. There is far too much to be bullish about. There is going to be a violent repricing,” they predicted.

Market sentiment appears to be shifting rapidly. The Crypto Fear & Greed Index, which gauges overall investor confidence, plunged from a “Greed” score of 72 on Feb. 4 to a “Neutral” rating of 54 just a day later.

Unexpected Market Behavior

This turbulence contradicts the consensus among analysts in late 2024, which suggested that Bitcoin dominance would peak in early 2025 following Trump’s election victory and speculation about the U.S. adopting Bitcoin as a reserve asset. According to this theory, capital would then flow into altcoins, igniting the long-awaited “altcoin season.”

However, at the time of writing, Bitcoin dominance stands at 61.47%, surpassing the 60% threshold predicted by crypto analyst Benjamin Cowen in August 2024 as the potential peak before an altcoin rally.

Bitcoin reached a new all-time high of $109,000 on Jan. 20—coinciding with Trump’s inauguration—but has since experienced heightened volatility. Many traders base their strategies on historical market behavior, often underestimating macroeconomic factors.

On Feb. 3, fears of a trade war escalated following Trump’s announcement of new tariffs on Canada, Mexico, and China. The uncertainty triggered what some are calling the largest liquidation event in crypto history.

According to CoinGlass, more than $2.24 billion was wiped out of the crypto markets within 24 hours. Some analysts argue the real figure could be closer to $10 billion.

Although Trump later decided to pause the tariffs on Canada and Mexico following negotiations, Bitcoin has struggled to reclaim the psychologically significant $100,000 price level.

At the time of writing, Bitcoin is trading at $97,925, according to CoinMarketCap.

Is the Market Just Getting Started?

Despite the chaos, some analysts remain optimistic. MN Capital founder Michaël van de Poppe believes the current climate is only the beginning of a new cycle for crypto.

“The U.S. government is setting the stage for a golden age for crypto,” he said in a Feb. 4 X post. “Yet people think the market has peaked. In reality, it’s only just getting started.”

While short-term volatility remains a challenge, seasoned investors are watching closely to see whether Bitcoin can regain momentum—or if altcoin season will finally take center stage.