Bitcoin loses Trump-era gains as crypto market volatility signals uncertainty

• Bitcoin's 1% market depth dropped from over $8 million to roughly $5 million after October 2025, causing sharper price swings as reduced liquidity makes even small trades trigger larger movements
• Trump's administration delivered on crypto industry priorities like SEC reform and stablecoin regulation, but has not launched the anticipated bitcoin buying spree for a strategic reserve, disappointing some investors
• Bitcoin experienced its largest crypto liquidation event in history in October after Trump announced tariffs on Chinese imports, with that lost liquidity yet to fully return to the market

Bitcoin Loses Trump-Era Gains Amid Market Volatility

Key Developments:

Bitcoin has erased all gains made since President Donald Trump's November 2024 election, falling below $61,000 on Thursday—its lowest level since a month before the election. The cryptocurrency had previously reached an all-time high above $125,000 in October before declining 20% last week, though it rebounded Friday to rise above $70,000.

Liquidity Crisis:

Bitcoin's market depth has contracted significantly, with average 1% market depth falling from over $8 million in 2025 to approximately $5 million currently. This reduced liquidity is causing sharper, more erratic price movements. The decline accelerated after October's "largest crypto liquidation event in history" following Trump's tariff announcements on Chinese imports.

Trump Administration Impact:

Despite Trump's pro-crypto stance and campaign promises, including establishing a strategic bitcoin reserve, policy implementation has disappointed some investors. While the administration created a bitcoin reserve from seized assets and passed stablecoin regulation, the government has not initiated a bitcoin buying spree as some anticipated. Trump is personally involved in crypto ventures including a meme coin and World Liberty Financial.

Market Outlook:

Analysts are divided on bitcoin's trajectory. Research analyst Thomas Probst warns that liquidity contraction will likely persist, while Jefferies sees "few bullish indicators" suggesting a bottom. However, CoinShares' James Butterfill believes the market may be near bottom, with investors viewing current prices as buying opportunities.

Bitcoin has become increasingly correlated with equities during market stress, making it more sensitive to macroeconomic concerns about tech valuations and Federal Reserve rate cut uncertainty.