The crypto market is bracing for impact as President Donald Trump’s return to office reignites trade war tensions. With the US Dollar Index (DXY) following a pattern similar to 2016, many analysts are drawing comparisons to the 2017 bull cycle that saw Bitcoin (BTC) and altcoins surge to new highs.

But could history repeat itself, or are today’s market conditions too different?

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Source: US Dollar Index (DXY)

A recent analysis by ZeroHedge highlights that DXY’s movements in 2025 closely resemble its 2016 trajectory. Historically, Bitcoin has shown an inverse correlation to the dollar’s strength, meaning a potential decline in DXY could set the stage for a BTC rally, much like what happened in 2017.

The macroeconomic environment is shifting. Additionally, gold has surged over 10% year-to-date as investors seek safe-haven assets, while Bitcoin has fallen 10%, signaling a shift in risk appetite. This divergence suggests that traders are waiting for a clear direction amid uncertainty surrounding Trump’s trade policies.

Tariff War 2.0: Impact on Crypto

The first Trump-era trade war (2018-2019) led to increased market volatility, but it also created opportunities for investors who bought Bitcoin during dips. Analysts believe a similar scenario could unfold with Trump’s second tariff war, as macroeconomic disruptions may push capital into alternative assets like cryptocurrencies.

Adding to the intrigue is Trump’s recent executive order establishing a US Bitcoin reserve. While it initially caused a sell-off due to the lack of an immediate government buying plan, the long-term implications could be bullish if the US adopts a more favorable stance on crypto regulation.

Altcoin Season Incoming?

Another trend mirroring 2017 is the potential for an upcoming “Altcoin Season.” Historically, altcoins have rallied after Bitcoin establishes a strong uptrend, benefiting from capital rotation. Analysts argue that if Bitcoin follows its past cycle, a major altcoin rally could be next.

Crypto investor bitcoindata21 points out that Bitcoin’s price action in 2025 strongly resembles 2017, reinforcing the belief that the market could be on the brink of another explosive growth phase. With an expanding M2 money supply and a weakening dollar, liquidity conditions may soon favor a crypto resurgence.

What’s Next for Investors?

While historical patterns suggest potential upside, market conditions remain fluid. Bitcoin recently dropped $2,000 in 25 minutes, reflecting ongoing volatility. For traders, the key takeaway is that periods of uncertainty often present the best long-term opportunities.

If the 2017-2020 cycle repeats, the crypto market could see renewed bullish momentum in the coming months. However, given the unpredictable nature of macroeconomic shifts, investors should stay cautious, watching key indicators like DXY, Bitcoin dominance, and liquidity trends to navigate the evolving landscape.

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