• Bitcoin declined over 16% in the past month after reaching a $108,364 all-time high.
• Reduction in investors’ activities led to a crypto market decline.
• Optimists expect Trump’s inauguration to trigger a crypto market recovery.

The cryptocurrency market has experienced a significant downturn, with prices falling 9.57% in January 2025. This decline, which began after Bitcoin’s retreat from its $108,364 all-time high in December 2024, has reduced the total market capitalization from $3.73 trillion to $3.16 trillion, according to TradingView.

A report by crypto market analyst Ali Martinez, analyzing the aggregate market realized value net position change, reveals that capital inflows dropped by 56.7% in the past month, with investments shrinking from $134 billion to $58 billion, based on Glassnode data. This dramatic decline reflects reduced investor confidence and a cautious approach from institutional investors moving through the first quarter of 2025.

Bitcoin and Altcoins Bear the Brunt of the Market Pullback

Bitcoin, the market leader, saw its price fall 16% in the past month, dropping to a critical support level of $90,680. Analysts warn that breaching this support could push BTC prices to the $73,000 range.

Related: BTC Faces Liquidity Challenges as Price Hits $95K, Says Matrixport

Altcoins fared worse, with their combined market capitalization plummeting 20% from $1.63 trillion to $1.31 trillion. Popular tokens like Ethereum and Solana have seen steep declines, mirroring the overall negative sentiment in the market.

Optimists See Opportunity Amid the Chaos

Despite the bearish trends, some investors view this correction as a buying opportunity. The incoming Donald Trump administration, known for its pro-crypto stance, has raised hopes for market-friendly policies in 2025.

Historical trends support this optimism. Following Trump’s 2024 election victory, Bitcoin surged past the $100,000 mark, driving gains across the cryptocurrency sector. Many traders believe the current market slump could set the stage for another rally in the months ahead.