The past few months have been a rollercoaster for Bitcoin investors. After reaching dizzying heights in January, the cryptocurrency has retreated over 26% from its all-time high. The pullback has left many wondering: is this a buying opportunity or the beginning of a more sustained downtrend?
The answer, according to multiple Wall Street analysts, might depend on your timeframe. Those with patience may find their resolve rewarded as soon as next month.
Why Bitcoin Could Stage a Comeback in Q2
Bitcoin has maintained two persistent correlations that savvy investors should be watching closely:
- A positive correlation with global money supply growth (M2)
- A negative correlation with the U.S. dollar index (DXY)
These relationships aren’t merely theoretical—they’ve been reliable indicators throughout Bitcoin’s history. And right now, both are signaling potential strength after March.
“Bitcoin has consistently tracked the inverted DXY on a ~10-week lag,” explains Wells Fargo equity analyst Christopher Harvey. This relationship suggests the current drawdown is largely a reaction to the strong dollar environment we saw in Q4 of 2024.
What’s particularly encouraging is that the DXY peaked on January 13th—about eight weeks ago. If the historical pattern holds, we’re approaching the point where Bitcoin typically begins responding to dollar weakness.
Compass Point analyst Ed Engel takes this analysis a step further, noting that “Global M2 has historically led BTC prices by three months.” After Global M2 bottomed in early 2025, it has since rebounded alongside recent USD weakness.
Engel’s conclusion? “If BTC maintains its correlation with Global M2, this implies further weakness in March before a significant rally in 2Q25.”
The $90,000 Threshold: A Critical Level to Watch
While hovering around $84,300 (up 4.89% at last check), Bitcoin’s behavior around the $90,000 level will be telling. This price point has served as key support throughout 2025, and a decisive move above the $91,000-$92,000 range would provide technical confirmation that the worst may be behind us.
However, not all analysts share this optimism. Wolfe Research cautions that recent price action shows “notable breakdowns across the board through key support levels,” adding that “This is not the action of a group readying to rally.”
Politics vs. Market Reality: A Conflicting Narrative
What makes the current Bitcoin landscape particularly interesting is the disconnection between political tailwinds and market performance. The cryptocurrency industry is operating under an increasingly favorable political environment, with the Trump administration promising to create conditions where crypto businesses can thrive.
Despite these developments, Bitcoin has struggled to maintain momentum. The market seems more concerned with broader economic issues—particularly the specter of trade wars—than regulatory improvements.
This divergence creates a potential opportunity. If macroeconomic concerns ease while the regulatory environment continues to improve, Bitcoin could benefit from a powerful combination of catalysts in the second quarter.
What This Means For Your Portfolio
If you’re already invested in Bitcoin, the historical correlations suggest patience may be warranted. The next few weeks could bring continued weakness, but the second quarter presents a potentially more favorable environment.
For those on the sidelines, this period of weakness might offer an entry point—provided you’re comfortable with near-term volatility. The key is to watch those $90,000+ levels as confirmation of any sustainable rally.
The most prudent approach? Consider dollar-cost averaging through the current turbulence rather than trying to precisely time the bottom. The correlations with M2 and the dollar index suggest a potential recovery, but timing precision is notoriously difficult in cryptocurrency markets.
What’s clear is that despite the recent pullback, Bitcoin’s fundamental narrative remains intact. The combination of institutional adoption, favorable political shifts, and historical correlation patterns suggests that while March might test investors’ resolve, April and beyond could reward those who maintain theirs.
