Crypto Recovery May Take Two Months Amid Tariff Threats

The crypto market may take over two months to fully recover if the 2022 pattern repeats, according to a crypto analyst. The market is still grappling with the aftermath of U.S. President Donald Trump's tariff threats, which triggered massive crypto liquidations and raised concerns of a trade war.

Crypto analyst Matthew Hyland has warned that it may take until April for the market to recover, with some altcoins unlikely to reach their December highs for at least two months. Hyland based his expectations on the Feb. 3 liquidation event, which saw over $2.24 billion liquidated from the crypto markets within 24 hours. Some crypto commentators suggest the figure could have been significantly higher.

The liquidation event came amid escalating concerns over a potential trade war caused by Trump's 25% tariffs on Canada, Mexico, and China. Trump later paused the planned tariffs on Canada and Mexico after negotiations. On Feb. 3, Bitcoin (BTC) fell to $92,584, dipping below the $100,000 psychological level for the first time since Jan. 27.

Hyland said this signals that the "low is in" but warned that other events in 2020 and 2022 that caused similar market disruption "took over 2 months for the full recovery to take place." In 2020, the onset of the COVID-19 pandemic saw Bitcoin's price shed as much as 47% of its intraday value from March 12 to March 13, with BTC falling to $5,017. By August, just five months later, Bitcoin was trading above $11,000.

Similarly, in 2022, the collapse of the Terra blockchain in May and the collapse of the crypto exchange FTX in November both "took months" to recover from. Hyland said a "straight recovery" in a matter of days "is just not likely." "Even a V shape like 2020 took weeks with many dips on the way back up," Hyland said.