Bitcoin Price Fluctuates as US Tariffs Shake Market Outlook
Bitcoin price (BTC) is facing turbulent market conditions as heightened US tariffs fuel economic uncertainty. The leading cryptocurrency, currently trading at $83,555, is grappling with a market sentiment reminiscent of the 2022 bear cycle. Analysts now suggest that Bitcoin price movements hinge on US liquidity trends, with a potential bounce at $71,000 or a breakout past $91,000 determining its next direction.
US Tariffs spark market volatility
The recent announcement of reciprocal trade tariffs by former President Donald Trump on April 2 had an immediate and dramatic effect on financial markets. While the S&P 500 managed to close 0.7% higher on Wall Street, Bitcoin price experienced a significant decline, dropping by 8.5% within a single day.
Financial analysts are drawing parallels between the current economic outlook and past periods of market distress. According to Charles Edwards, founder of Capriole Investments, the Philadelphia Fed Business Outlook Survey (BOS) is now at levels comparable to major economic downturns such as 2000, 2008, and 2022. This survey measures business sentiment, and its decline to below 15 for the first time since early 2024 suggests a growing economic risk.
The role of the Philadelphia Fed business outlook survey
In a recent market update, Capriole Investments noted that while the BOS data can sometimes give false signals, it remains a critical indicator of economic sentiment. Edwards highlighted the importance of staying vigilant, especially as global trade tensions escalate and corporate profit margins potentially shrink.
“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,” Edwards wrote in his analysis.
The survey’s significance in Bitcoin price movements stems from its historical correlation with financial market downturns. The last time the BOS was at such low levels, Bitcoin’s price had plunged to $15,600 during the 2022 bear market.
Bitcoin price key levels: $71K and $91K
With Bitcoin’s price reacting sharply to macroeconomic shifts, analysts are now closely watching critical support and resistance levels. According to Capriole’s latest market update, a daily close above $91,000 would be a strong bullish indicator, signaling a potential rally. However, failure to reclaim that level could see Bitcoin drop into the $71,000 range, where a sizable bounce is expected.
“All else equal, a daily close above $91K would be a strong bullish reclaim signal,” Capriole noted in its report. “Failing that, a dip into the $71K zone would likely see a sizable bounce.”
US liquidity trends and Bitcoin’s future
Despite the economic uncertainty caused by rising tariffs, analysts see a potential silver lining for Bitcoin price in the form of increasing global liquidity. The US Federal Reserve has already begun easing its tight financial policy, and market watchers speculate that a return to quantitative easing (QE) could be on the horizon.
“How long until the Powell printer starts humming?” Edwards questioned, referring to Fed Chair Jerome Powell’s potential move to increase money supply.
Further supporting this outlook, financial analyst Colin Talks Crypto highlighted the anticipated growth of the M2 money supply, a key measure of liquidity in the economy. Historically, an influx of M2 money supply has preceded major Bitcoin price surges, with some analysts predicting a potential rebound by May.
As Bitcoin navigates a volatile macroeconomic landscape, Bitcoin price movements are being shaped by US tariff policies and liquidity trends. While uncertainty remains, analysts are closely monitoring the $71K and $91K levels to determine the cryptocurrency’s next trajectory. With the Fed’s monetary policies in focus, Bitcoin investors and traders must remain vigilant, as upcoming economic developments could significantly influence the asset’s future direction.
