Crypto market witnesses $2 billion liquidation, divided opinions on recovery timeline

In what is being dubbed as the biggest liquidation event ever seen in the crypto market, over $2 billion worth of positions were wiped out on Monday. As talks of an 'altcoin season' loom large, experts remain split on whether February holds the key or if April will be the turning point for cryptocurrencies.

Reflecting on past market crashes, analysts are drawing parallels to the events of 2020 and 2022 to gauge the current scenario and potential recovery prospects.

BeInCrypto highlighted the unprecedented liquidation event triggered by US President Donald Trump's tariff announcements on Monday. However, following an agreement with Canada and Mexico, the market experienced some level of respite.

Despite signs of stabilization, analysts are cautious about calling it a full-fledged market recovery. Blockchain analyst Mathew Hyland emphasized the need for patience, stating that while Bitcoin weathered the storm, altcoins bore the brunt of the historic liquidation event. The extent of the damage suffered by altcoins indicates that the recovery process may be prolonged.

Hyland pointed out that while the recent liquidation may mark the market's bottoming out, a significant bounce back might still be down the road.

On the opposite end of the spectrum, there are analysts like CryptoCon who view the recent market shakeout as a necessary correction for overly leveraged traders. Despite acknowledging the ongoing cycle, they refrain from predicting an immediate recovery.

Looking ahead, analysts like Merlijn The Trader foresee February as the launching pad for an altcoin season and subsequent market revival. Citing historical patterns, they believe that February typically sets the stage for altcoin rallies.

While opinions remain divided on the exact timeline for recovery, the overall sentiment in the crypto community suggests a cautious optimism towards a potential turnaround in the coming months.