Bitcoin’s recent slide has been compared to memories of 2020’s market turmoil, as a CoinShares analyst suggests Bitcoin may be following a familiar crash-and-rebound script.
Parallel to the events surrounding the COVID-19 panic, geopolitical shocks, this time driven by Trump-China tariffs, have destabilized global markets and created an “eerie sense of déjà vu” among seasoned investors.
BREAKING: China just imposed an additional 84% tariff on US goods.
This is going to kill many US Farmers’ businesses.
This is going to harm US pharmaceutical companies, aircraft manufacturers, and multiple other hardworking Americans. pic.twitter.com/rIVyfGAAsM
The analyst argues that despite the mounting macroeconomic pressure and bearish technical signs, the current downturn might resemble the setup of 2020, where a deep correction was followed by a powerful rebound fueled by monetary policy shifts and investor optimism.
The market turbulence of recent days has been nothing short of dramatic. Trump’s new round of tariffs has roiled global trade dynamics, sending volatility indices soaring to levels unseen since the height of the COVID crash.
Even oil, which should benefit from tight supply, has collapsed to five-year lows. Meanwhile, Bitcoin is nursing a 30% drop from its late-January highs, net ETF flows are 10% off peak, and the mempool is almost entirely cleared, offering little on-chain activity to anchor bullish hopes.
Source: Cryptonews
Yet, the analyst remains cautiously optimistic, pointing to strong historical parallels and the broader economic cycle to argue that Bitcoin could be setting the stage for another breakout year.
Tariffs, Tantrums, and the Specter of 2020
The current macroeconomic setup bears uncanny similarities to the pre-COVID climate in 2019 and early 2020, per the analyst.
Then, as now, Bitcoin had just come off a euphoric rally, first sparked by false ETF optimism in 2019 and now by actual ETF approvals in late 2024. Both times, the rallies lost steam amid growing global economic unease.
In 2020, it was recession fears, yield curve inversions, and repo market failures. Now, it’s renewed trade wars, long-term inflation damage, and looming sovereign debt crises.
Back in 2020, Bitcoin hovered around $10,000 after rallying from the ashes of the 2018 bear market.
That rally, much like today’s, was based more on sentiment than fundamentals.
Today, we find ourselves at a similar inflection point. The speculative high around $100,000, fueled by ETF optimism and dreams of a national Bitcoin stockpile under Trump’s pro-crypto administration, has fizzled.
According to the analyst, key on-chain indicators like UTXO bands are flashing warning signs, adding fuel to the bearish fire.
Source: CoinShare Report
The reversal of the green active band and rise of the short-HODL light blue band typically signal the start of bearish phases.
However, the analyst points out a curious anomaly as this pattern also emerged in 2020, just before a fake-out led to an explosive bull market instead.
Printing Press Primed as Tariff Chaos Spreads
While the tariff threats may appear unserious, slapped on with clumsy formulas and targeted at non-sovereign entities, their impact could still be severe.
The CoinShares analyst believes this is a classic Trump negotiation tactic, which is an over-the-top opening gambit meant to extract more reasonable concessions from trade partners. Still, the damage inflicted in the interim could be real and widespread.
As trade uncertainty saps investor confidence, equity markets teeter on edge. The S&P 500 nearly posted its worst three-day performance since 1987, a clear sign that sentiment is fraying.
The S&P 500 has now erased all gains since March of 2022.
The implications for Bitcoin are twofold. On one hand, macro fear has dragged the crypto markets lower. On the other hand, these same pressures could prompt central banks to pivot, just like in 2020.
The analyst believes the U.S. is on an unsustainable path, with debt-to-GDP levels so high that maintaining current interest rates risks triggering a fiscal crisis.
In short, the analyst argues that while today’s challenges differ in scale and character from the COVID crisis, the underlying dynamics are strikingly similar.
A macro shock has pulled Bitcoin down from speculative highs, but the forces that fueled its meteoric recovery in 2020 may soon return.
If history is any guide, the next step could be a violent rebound, especially as fiscal and monetary policy are once again forced to accommodate a fragile global system.
@CryptoHayes suggests China’s yuan devaluation amid trade tensions could spark capital flight into Bitcoin, reviving its role as a safe haven during economic uncertainty.#Bitcoin#Cryptohttps://t.co/ckhiVqj72F
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 
@CryptoHayes suggests China’s yuan devaluation amid trade tensions could spark capital flight into Bitcoin, reviving its role as a safe haven during economic uncertainty.#Bitcoin #Cryptohttps://t.co/ckhiVqj72F