Do Wall Street Experts Expect a Bull in Bitcoin After Declines? Here’s What They Say

According to analysts, Bitcoin investors could see a comeback in the second quarter of 2025 if $BTC continues its historical correlations. Despite a rocky start to the year, Wall Street is optimistic about a possible rally after the March pullback.

Bitcoin ($BTC) is down 14% year-to-date and remains around 26% below its all-time high reached in January. The cryptocurrency market has been volatile, in part due to President Donald Trump’s tariff threats that have rattled broader financial markets. But $BTC has held steady around $80,000 this week, raising questions about whether this is a buying opportunity or a sign of further declines.

Analysts point to two key indicators that could signal a recovery in Bitcoin: its positive correlation with global money supply growth (M2) and its inverse correlation with the US dollar index (DXY).

“Bitcoin has consistently trailed the inverse DXY with a lag of about 10 weeks,” Christopher Harvey, equity analyst at Wells Fargo, wrote in a report. He suggested that the recent pullback was a delayed response to the strong dollar environment in Q4 2024. However, since the DXY peaked on Jan. 13 and has weakened since then, this could create a more favorable environment for Bitcoin going forward.

Ed Engel, an analyst at Compass Point, echoed this sentiment, emphasizing the role of global liquidity. “Global M2 has historically led $BTC prices by about three months,” Engel wrote in a note on Monday. “As global liquidity bottoms out in early 2025 and begins to recover, we could see further weakness in March before a significant rally in Q2.”

Despite the struggles in the crypto market, the industry is experiencing an increasingly favorable political environment. The current U.S. Congress is largely supportive of crypto, and the Trump administration has made significant promises to foster an industry-friendly regulatory environment. However, clear regulatory guidelines for crypto businesses remain elusive and uncertain for investors.

Meanwhile, global economic concerns continue to weigh on the market. The ongoing trade war and its impact on stocks have weighed heavily on investor sentiment despite positive inflation data.

Analysts at Wolfe Research remain cautious about a near-term breakout. “We are seeing significant breaks of key support levels,” the firm said in a report. “This is not the action of a group preparing to rally. Instead, we fear a transition into a period of sustained weakness.”

According to Wolfe Research, a break above the $91,000 to $92,000 range could provide short-term relief as the $90,000 threshold has been a critical support level for Bitcoin in 2025. However, the firm remains skeptical of a sustained recovery and suggests that any upward movement could be met with selling pressure.

*This is not investment advice.