Crypto Market Down 21%, but a Comeback May Be Near

Crypto Market Faces Dip, but 2025 Rally Expected

Crypto Market– The total cryptocurrency market capitalization reached an all-time high of $3.73 trillion on December 14, 2024. However, since then, the market has experienced a 21% drop, bringing the total market cap down to $2.91 trillion. Despite this decline, one analyst predicts a potential recovery and an upward trajectory for the crypto market in Q2 2025.

Mark Quant, a crypto market researcher, suggests that an increase in the Global Liquidity Index (GLI) could be a key factor in the crypto market’s recovery. The GLI measures global financial conditions and the ease with which investors can access capital. When the GLI rises, it signals that capital is more accessible, which can lead to a boost in risk-on assets like cryptocurrency. Quant’s study showed a strong 0.77 correlation between the GLI and the total market cap, with a 74-day delay. Historically, when the GLI rises, it has been followed by bullish trends in crypto markets.

Predictions for Q2 2025: A Bullish Outlook?

Quant predicts that if current trends continue, the crypto market could reach new all-time highs, potentially exceeding $4 trillion in Q2 2025. While the market might experience sideways movement over the next month, Quant believes that the first quarter of 2025 could set the stage for a bullish rally in April.

Despite a 20% drop in the total market cap over the last three months, market analyst Dom believes the crypto market is testing previous cycle highs for support. He pointed out that the market is currently sitting just below key support levels from March 2024 and the 2021 highs. Dom suggested that if the market accepts a drop below these levels, it could break the bullish trend.

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.