Bitcoin (BTC) faces “very high risk” conditions from US trade tariffs, which could lead to a slump to $71,000.
In his latest analysis, Charles Edwards, founder of Capriol Investment, the Quantitative Bitcoin and Digital Asset Fund, warned of the impact of US trade tariffs “higher than expected.”
“Higher than expected” US tariffs put Bitcoin in pressure
Bitcoin has responded significantly worse than US stocks after President Donald Trump announced global mutual trade tariffs on April 2.
BTC/USD fell to 8.5% on the day, while the S&P 500 managed to outperform Wall Street trading sessions by 0.7%.
Edwards said the expectations of American businesses reflect the kind of uncertainty that has only been seen three times since the turn of the millennium.
“Think of this as a higher tariff than expected. The Philadelphia Fed’s Business Outlook Survey shows today’s expectations comparable to 2000, 2008 and 2022,” he told X-followers.
In the accompanying chart, the Philadelphia Fed Business Outlook Survey (BOS) has returned under the age of 15 for the first time since its launch in 2024.
Philadelphia Fed Business Outlook Survey vs. S&P500. Source: Charles Edwards/X
In Capriol’s latest market update on March 31, Edwards acknowledged that BOS data can generate unreliable signals about market sentiment, but insisted that it should not be ignored.
“There is no future-view guarantee (the metric has a false signal), but this is a read of data that we had previously had in a very high risk zone (2000, 2008, 2022).
“Especially when the tariff war escalates significantly beyond current expectations or corporate margins begin to decline.”
For Bitcoin, the key level to watch in the aftermath of tariffs is $91,000, suggesting that US macroeconomic movements “determine the ultimate technological trends from here.”
“Everything else is equal, and daily closings above $91k will be a strong bullish recovery signal,” the update, along with the weekly BTC/USD chart.
“If you fail to do that, you can see a fair amount of bounce when you soak in the $71K zone.”
BTC/USD 1-day chart (screenshot). Source: Capriole Investments
BTC prices focus on US liquidity trends
As reported by Cointelegraph, silver lining for crypto and risk assets could come in the form of increased global liquidity.
Related: Bitcoin sales are $109,000, the highest ever “significantly down” cycle top – GlassNode
In the US, the Fed has already begun to relax its strict monetary policy, betting on its return to so-called quantitative easing (QE).
“How long will it take for Powell Printer to start humming?” Edwards asked.
Meanwhile, M2 money supply is expected to be “inflow.” This has historically caused major BTC prices.
“The big takeout (the most important observation) is that there’s a big M2 influx coming. The exact date isn’t that important,” analyst Colin tells Crypto, predicted this week on X-thread.
A comparison chart suggesting potential BTC price rebounds by the beginning of May.
US M2 Money Supply vs BTC/USD Chart. Source: Colin Talks Crypto/X
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
