Where Next for Bitcoin After Worst Quarter Since 2018?

Bitcoin ended the first quarter of 2026 with its worst performance since early 2018, losing nearly a quarter of its value due to war, tariffs and an aggressive Federal Reserve destroying risky assets.

The cryptocurrency fell from about $95,000 in February to about $66,700 at the end of the quarter, a decline of about 22% since the beginning of the year, according to a report from institutional trading firm Talos, based on data from its financial intelligence arm, Coin Metrics. According to the company, losses were as high as 34.6% at the lowest point of the quarter.

According to a Wintermute research note shared with Declutter.

Both institutions and retail investors are “sitting on the sidelines and unwilling to allocate capital” until they see regulatory clarity or a shift in geopolitical conditions, the trading firm added.

Despite the tough quarter, Bitcoin held up better than stocks and gold after the outbreak of the war in Iran on Feb. 28, falling just 1.5% compared to a 17% decline in gold, a 7.6% decline in the Nasdaq and a 7.4% decline in the S&P 500 over the same period, according to data from Talos.

Bitcoin’s performance for the quarter appears to be more of a “macro-driven reset than a structural shift,” said Samar Sen, head of international markets at Talos. Declutter.

“Crypto, among other risky assets, came under pressure following the escalation of the conflict in Iran, alongside tariffs and stricter policy expectations,” he added.

U.S. spot Bitcoin ETFs hold about $100 billion in assets and saw net inflows resume in March, suggesting institutional demand has weathered the downturn, Sen explained.

Liquidity in order books has also recovered from the lows seen in late 2025, allowing markets to “absorb larger moves”, with the market structure “holding up more consistently” than in previous cycles, he added.

“Periods of macro uncertainty tend to slow risk appetite, but also increase focus on risk management and portfolio diversification, and we see continued institutional involvement in that context,” he said.

Reaching for a reset

US monetary policy could prove to be the most important variable for Bitcoin’s near-term trajectory, according to Zeus Research analyst Dominick John, who told Declutter a pause or easing by the Fed would “free up liquidity, increase risk appetite and help stabilize Bitcoin,” while continued hawkishness “could tighten liquidity and increase selling pressure.”

A resolution to the ongoing conflict in the Middle East could be a “critical catalyst” for the next quarter, with the Fed’s stance on rate cuts serving as “the definitive turning point for a strong recovery or further collapse,” said Ryan Yoon, senior analyst at Tiger Research. Declutter.

In the prediction market Myriadowned by Declutter‘s parent company Dastan, users put just a 5% chance on the Fed cutting interest rates by more than 25 basis points in the first half of the year. Numerous users are also pessimistic about the conflict in Iran, with the likelihood of one A ceasefire between the US and Iran before June plummeting from 58% at the beginning of the week to 39% today, while the likelihood of this happening is high US to land before May have increased from 57% to 87% in the same time frame.

A “growing regional divergence” in markets like Iran, where access to global financial systems remains “restricted,” could also shape Bitcoin’s trajectory, Markus Levin, co-founder of decentralized data network XYO, told me. Declutter.

“Bitcoin use has historically increased during periods of economic pressure and is likely to increase again as conflict continues,” he said. “That demand won’t offset global macro forces in the short term, but over time it could lead to Bitcoin behaving more like a neutral reserve, closer to gold.”

According to CoinGecko data, Bitcoin was trading around $66,830 at the time of writing, which was flat on the day.