Bitcoin investors could get some relief in the second quarter if the cryptocurrency maintains two of its most persistent correlations, according to analysts. The price of bitcoin (BTC) is down 14% in 2025 and is sitting about 26% off its January all-time high after President Donald Trump 's tariff threats have wreaked havoc on the market. This week, bitcoin has held steady around the $80,000 level despite broader market volatility, leaving many investors of the cryptocurrency wondering if this is a buying opportunity or if there's more pain in store. Wall Street is taking clues from the flagship crypto's positive correlation with money supply growth, also known as M2, and its negative correlation with the U.S. dollar index, or DXY . "Bitcoin has consistently tracked the inverted DXY on a ~10-week lag," Wells Fargo equity analyst Christopher Harvey said in a note Wednesday. "The relationship suggests the current drawdown is a reaction to the strong dollar environment in [the fourth quarter], and that the weak dollar environment we have seen since the DXY peaked on January 13 (eight weeks ago) may be more constructive for the asset going forward." If these correlations hold up, bitcoin could rally after this month, according to Ed Engel, an analyst at Compass Point. "Global M2 has historically led BTC prices by three months, while BTC historically performs best during global liquidity expansion and USD weakness," Engel explained in a note Monday. "After Global M2 peaked in late September, liquidity contracted in Q4 before bottoming in early 2025. Since then, Global M2 has rebounded alongside recent USD weakness." "If BTC maintains its correlation with Global M2, this implies further weakness in March before a significant rally in 2Q25," he added. BTC.CM= YTD mountain Bitcoin (BTC) this year The cryptocurrency market has struggled for several weeks despite the industry's shifting political fortunes. The U.S. crypto industry is now operating under a Congress that is especially favorable toward it, and the Trump administration has made sweeping promises to create an environment in which crypto businesses can thrive . But even while the industry cheers the de-risking of U.S. crypto businesses, clear guidelines for companies haven't yet been established. Perhaps more importantly, trade war concerns have had a bigger hold on the market: Stocks have tumbled this week despite encouraging inflation data . "While we hold out hope for the group, knowing bullish commentary/news is always capable of sending prices soaring overnight, we are bound to the charts," Wolfe Research said in a note on Wednesday. "We are seeing notable breakdowns across the board through key support levels," the firm added. "This is not the action of a group readying to rally. Instead, we fear it speaks towards a shift into a period of sustained weakness." A move above the $91,000 to $92,000 range would allow for a sigh of relief in the near term, Wolfe Research said. The $90,000 threshold has acted as key support for bitcoin this year. "Our sense is that it would likely get sold however," the firm said. "We simply don't see an environment capable of supporting a meaningful turnaround in crypto." —CNBC's Michael Bloom contributed reporting.
