Bitcoin (BTC) faces “very high risk” conditions from US trade tariffs, which could spark a slump to $71,000.
In his latest analysis, Charles Edwards, the founder of quantitative Bitcoin and digital asset fund Capriole Investments, warned about the impact of “higher than expected” US trade tariffs.
”Higher than expected” US tariffs pressure Bitcoin
Bitcoin reacted noticeably worse than US stocks after President Donald Trump announced worldwide reciprocal trade tariffs on April 2. BTC/USD fell up to 8.5% on the day, while the S&P 500 managed to end the Wall Street trading session 0.7% higher.
Edwards said that US business expectations are reflecting the type of uncertainty seen only three times since the turn of the millennium. “Consider this as tariffs come in higher than expected. The Philly Fed Business Outlook survey is showing expectations today comparable to 2000, 2008 and 2022,” he told X followers.
An accompanying chart showed the Philadelphia Fed’s Business Outlook Survey (BOS) back under 15 for the first time since the start of 2024. Late 2022 was the pit of the most recent crypto bear market when BTC/USD reversed at $15,600.
In Capriole’s latest market update on March 31, Edwards acknowledged that BOS data can produce unreliable signals regarding market sentiment but argued that it should not be ignored. “While no guarantee of the future outlook (this metric does have false signals) this is a data reading we have had before at very high risk zones (year 2000, 2008 and 2022), telling us to keep a very open mind,” he wrote, adding: “Especially if the tariff war escalates significantly beyond current expectations or corporate margins start to fall.”
For Bitcoin, a key level to watch in the tariff aftermath is $91,000, with Capriole suggesting that US macroeconomic moves would “decide the ultimate technical trend from here.” “All else equal, a daily close above $91K would be a strong bullish reclaim signal,” the update explained alongside the weekly BTC/USD chart. “Failing that, a dip into the $71K zone would likely see a sizable bounce.”
BTC price focus on US liquidity trend
As Cointelegraph reported, a silver lining for crypto and risk assets could come in the form of increasing global liquidity.
In the US, the Fed has already begun to loosen tight financial policy, with bets on a return to so-called quantitative easing (QE) varying. “How long until the Powell printer starts humming?” Edwards queried.
M2 money supply, meanwhile, is due for an “influx,” something which has historically spawned major BTC price upside. “The BIG takeaway (the most important observation) is that a big M2 influx is coming. The exact date is less important,” analyst Colin Talks Crypto predicted in an X thread this week. A comparative chart hinted at a potential BTC price rebound by the start of May.
This article does not contain investment advice or recommendations.
Every investment and trading move involves risk, and readers should conduct their own research when making a decision.