Is the worst still yet to come for cryptocurrencies?
Technically, it officially enters the market in the second quarter. However, to know where it is going, we need to check where it is. The first quarter closed with the total cryptocurrency market capitalization falling by approximately 21%, continuing losses from Q4 2025 when it fell by approximately 24%.
In just six months, cryptocurrencies have technically lost more than $1.5 trillion. Bitcoin (BTC) They haven’t been bailed out either, making up 60% of those outflows – a sign they are lagging compared to other volatile assets. In support of this, the XAU/BTC ratio closed the first quarter nearly 40% higher, underscoring Bitcoin’s relative weakness against gold.
In short, despite recent optimism about Bitcoin’s “relative” resilience, the first quarter revealed that cryptocurrencies remain the weakest performers across asset classes. Against this background, US President Donald Trump’s recent blog post came at a more important time.
In doing so, President Trump warned of a possible severe attack on Iranian infrastructure, putting expectations of a ceasefire on hold. However, more than the content, it was the “timing” of the post that sparked a complete frenzy in the market. Notably, the US stock market will remain closed over the weekend, meaning the Post has temporarily prevented a series of liquidations.
But the real shift in momentum lies in oil prices. Even before this position, oil was shaking global markets. Now, additional geopolitical risks add to the uncertainty. Traders and investors are likely to react once the market reopens, making Monday a very volatile session for stocks. However, the spotlight is on cryptocurrencies – is a massive bloodbath looming?
Cryptocurrencies are trapped in a liquidity trap as market risks rise on the weekend
The cryptocurrency market’s roughly 21% decline in the first quarter was roughly in sync with oil prices.
It is worth noting that this trend is set to shape Monday’s market, especially with stocks likely to react. Take the Nasdaq (NDX), for example – it closed the first quarter down nearly 6%, marking its worst quarterly performance since Q1 2025.
Here lies the reason behind the conflict in the Middle East, which has led to a massive shortage of oil supplies. The Strait of Hormuz, responsible for nearly 20% of global oil exports, remains under serious threat. The impact is clear – oil closed the first quarter up nearly 70%, sending ripples across risk assets, including cryptocurrencies.
According to AMBCrypto, this is where President Trump’s recent post comes into play. With the official escalation now, analysts expect oil prices to rise towards $200 per barrel. In this context, the market reaction on Monday could be critical, with the potential for a sharp sell-off high.
Meanwhile, Bitcoin positioning indicator It turned negative, indicating a return of short trades. This is not random. Instead, it is a strategic move by traders, setting the stage for a possible decline for the cryptocurrency once Monday’s session begins. With cryptocurrencies largely trapped in a liquidity trap, any small move can lead to sharp price fluctuations, making the market more sensitive to any catalyst.
Against this backdrop, President Trump’s post has now become a major bearish catalyst. Once Monday’s session begins, stocks are set to react, putting cryptocurrencies at high risk of a liquidation bloodbath.
Final summary
- Q1 losses, negative positions, and liquidity traps set the stage for sharp downward movements.
- President Trump’s office and rising oil prices could lead to a major market reaction on Monday.
