Is the worst still yet to come for crypto?
From a technical standpoint, the market is officially rolling into Q2. However, to see where it’s headed, we need to check where it’s been. Q1 closed with the total crypto market cap down nearly 21%, extending losses from Q4 2025 when it fell by about 24%.
In just six months, crypto has technically lost over $1.5 trillion. Bitcoin [BTC] hasn’t been spared either, making up 60% of those outflows – A sign that it’s lagging compared to other volatile assets. Backing this, the XAU/BTC ratio closed Q1 up almost 40%, underlining BTC’s relative weakness versus gold.
In short, despite recent optimism around Bitcoin’s “relative” resilience, Q1 revealed crypto was still the weakest performer across asset classes. Against this backdrop, a recent post by U.S President Donald Trump couldn’t have come at a more critical time.
In it, President Trump sounded a warning about a potentially severe attack on Iran’s infrastructure, putting ceasefire expectations on hold. However, more than the content, it’s the “timing” of the post that’s sparked a full-blown market frenzy. Notably, the U.S stock market will remain closed over the weekend, which means the post has temporarily prevented a liquidation cascade.
The real momentum shift, however, is in oil prices. Even before the post, oil had been rattling global markets. Now, the added geopolitical risk layers in more uncertainty. Traders and investors are likely to react as soon as the market reopens, making Monday a highly volatile session for equities. The spotlight, however, falls on crypto – Is a massive bloodbath looming?
Crypto locked in a liquidity trap as weekend market risk spikes
The crypto market’s nearly 21% drop in Q1 has moved almost in lockstep with oil prices.
Notably, this trend is set to shape Monday’s market, especially with equities likely to react. Take the NASDAQ (NDX), for example – It closed Q1 down nearly 6%, marking its worst quarterly performance since Q1 2025.
Here, the culprit is the ongoing Middle East conflict, which has created a massive oil supply squeeze. The Strait of Hormuz, responsible for roughly 20% of global oil exports, remains under serious threat. The impact is clear – Oil closed Q1 up nearly 70%, sending ripples across risk assets, including crypto.
According to AMBCrypto, that’s where President Trump’s recent post comes into play. With the escalation now official, analysts are expecting oil prices to surge towards $200 per barrel. In this context, Monday’s market reaction could be critical, with the odds of a sharp sell-off looking high.
Meanwhile, Bitcoin’s positioning index flipped negative, signaling that shorts are returning. This isn’t random. Instead, it’s a strategic move by traders, positioning for a potential downside in crypto once Monday’s session kicks off. With crypto heavily locked in a liquidity trap, even a small move could trigger sharp price swings, making the market extra sensitive to any catalyst.
Against this backdrop, President Trump’s post is now a key bearish trigger. Once Monday’s session begins, equities are set to react, putting crypto at high risk of a liquidation-driven bloodbath.
Final Summary
- Q1 losses, negative positioning, and a liquidity trap are setting the stage for sharp downside moves.
- President Trump’s post and surging oil prices could trigger a major market reaction on Monday.
