Bitcoin’s difficult start to 2025
Bitcoin is trading around $68,700 right now, which puts it down nearly 22% since the beginning of the year. That’s a pretty rough start, honestly. The cryptocurrency began 2025 near $87,700, so we’re talking about almost $20,000 lost in just a few weeks. That kind of movement puts pressure on everything else in the crypto space, not just Bitcoin itself.
Early-year weakness isn’t exactly unusual for Bitcoin. It happens. But the scale of this decline has people wondering if the current correction might have more room to run. I think that’s a fair question to ask, given how things have been playing out.
A historical perspective on Q1 performance
Looking back, Bitcoin has posted a negative first quarter in 7 of the past 13 years. So it’s not unprecedented. But here’s the thing: a 22% drawdown would mark its worst Q1 performance since 2018. That was during the bear market when Bitcoin plunged nearly 50% in the opening months of the year.
January and February both closed in the red, which increases the likelihood of a rare back-to-back negative start. To really shift the narrative at this point, Bitcoin would need to reclaim the $80,000 region. That seems pretty distant given the current momentum, or lack thereof.
But history shows that weak first quarters don’t necessarily define the full year. In eight of the past thirteen years, Q2 actually delivered the opposite performance of Q1. So the medium-term outlook might be more nuanced than the headlines suggest.
Technical concerns and leverage patterns
Between February 12 and February 15, Bitcoin staged a sharp 9% rebound. On the surface, that looked constructive. But underneath, leverage data tells a different story.
Open interest in Bitcoin futures jumped from roughly $19.6 billion to $21.47 billion during that rebound. That’s an increase of nearly $1.9 billion. Funding rates also turned strongly positive, signaling that traders were aggressively positioning for further upside.
The problem is that the broader chart structure still resembles a bear flag. The recent rally unfolded within what looks like a downward continuation pattern, and price is now drifting back toward the lower boundary of that structure.
Momentum indicators add to the caution. A hidden bearish divergence formed on the 12-hour chart, with price making a lower high while RSI printed a higher high. This pattern often appears when sellers are quietly regaining control.
At the same time, Bitcoin’s Net Unrealized Profit/Loss surged by roughly 90% over several days. That indicates many holders quickly returned to paper profits. Similar profit spikes in early February preceded a 14% drop. If traders rush to lock in gains again, selling pressure could accelerate.
Key levels to watch
Technically, the $66,270 area is a critical near-term support. A confirmed breakdown below this zone would activate that bear flag continuation pattern we mentioned.
If that happens, the next major downside target sits near $58,800. That aligns with the 0.618 Fibonacci retracement and represents roughly a 14% decline from current levels. A deeper extension could bring the $55,600 region into play.
On the upside, Bitcoin needs to reclaim $70,840 to stabilize in the short term. A stronger breakout above $79,290 would invalidate the bearish structure and signal that buyers have regained control.
Broader market context
Beyond price action, broader market metrics paint a complex picture. Bitcoin dominance remains elevated near 58.5%, suggesting capital continues to favor Bitcoin over altcoins during this correction. That relative strength often appears in defensive market phases.
Meanwhile, public Bitcoin treasuries continue to hold substantial Bitcoin reserves. Data shows over 1.13 million Bitcoin collectively held by public firms, led by large corporate holders. The largest of these holders is Strategy, which holds 3.27% of the total Bitcoin supply.
While this structural demand doesn’t prevent short-term volatility, it does reinforce Bitcoin’s long-term institutional footprint. So we’re seeing Bitcoin caught between historical resilience and near-term technical weakness.
The 22% year-to-date drop puts Q1 on track for an unenviable record. Meanwhile, leverage, divergence signals, and on-chain profit metrics suggest that downside risk toward $58,000 cannot be ruled out.
At the same time, elevated dominance and continued corporate accumulation highlight that the broader structure is under pressure, but not yet broken. The coming weeks will likely determine whether this is simply another rotational phase within a larger cycle or the start of a deeper corrective leg.
