New analysis suggests that Bitcoin could see a “significant surge” to $71,000 if the imposition of US trade tariffs puts further pressure on the currency’s price. Bitcoin is facing “very high-risk” conditions due to US trade tariffs, which could cause its price to drop to $71,000.
US Tariffs and Pressure on Bitcoin
In his latest analysis, Charles Edwards, founder of Capriole, a quantitative investment fund specializing in Bitcoin and digital assets, warned of the “higher-than-expected” impact of US tariffs on cryptocurrency markets.
Bitcoin’s price fell sharply after US President Donald Trump announced global trade tariffs on April 2. The BTC/USD pair fell 8.5% on the day, while the S&P 500 managed to end the session up 0.7%.
Edwards explained that the US business outlook reflects a type of uncertainty that has only been seen three times since the beginning of the millennium. He said, “Higher-than-expected tariffs are impacting business expectations, making it more difficult to forecast economic trends.”
The accompanying chart showed that the Philadelphia Federal Reserve’s (BOS) Business Expectations Survey returned to lows not seen since the beginning of 2024. The last similar low was in late 2022, when the BTC/USD pair recorded a sharp decline to $15,600.
The Impact of Declining Confidence on the Bitcoin Market
In his latest update, dated March 31, Edwards acknowledged that data from the Bank of Sydney may provide unreliable signals regarding market sentiment. However, he noted that this data should not be ignored due to its potential warning signs during periods of market volatility.
“While these forecasts may be inaccurate in some cases, they are a reminder of the high risks we face, as they did in 2000, 2008, and 2022,” he added.
Bitcoin Forecasts Amid Difficult Economic Conditions
The $91,000 price level is important for monitoring Bitcoin’s performance after the tariffs are imposed. Edwards explained that a daily close above this level could signal the start of an upward recovery, while a drop to $71,000 could lead to a rapid trend reversal.
US Liquidity Trends and Their Impact on Bitcoin
There is hope for cryptocurrencies and risk assets if global liquidity increases. The US Federal Reserve has already begun easing its tight monetary policy, which could contribute to increased liquidity flows into risky assets like Bitcoin.
Edwards wondered, “How long will it take for Powell’s printer to start working?” With the increased liquidity flow, experts expect the M2 money supply to rise, which could stimulate Bitcoin’s price.
Bitcoin: A Hedge Against Economic Instability
Amid the significant volatility in financial markets following Trump’s tariff announcement, experts indicated that Bitcoin could strengthen its position as a hedge against global economic instability. According to Daan Crypto Trades, if Bitcoin’s price maintains its $76,500 level until the US tax deadline on April 15, the market may avoid further declines.
Impact of Tariffs on the Cryptocurrency Market
President Trump’s imposition of tariffs on April 2 had a significant impact on the cryptocurrency market. Initially, Bitcoin saw a slight rise due to speculation, but prices quickly declined.
Bitcoin’s price fell 2.6% after the announcement, from around $88,500 to $82,876. In contrast, Ethereum saw a sharp 6% decline from $1,934 to $1,797. The total cryptocurrency market capitalization also fell 5.3% to $2.7 trillion.
As market sentiment declined, fear levels rose, as evidenced by the Cryptocurrency Fear and Greed Index, which registered a “very fearful” level of 25. Bitcoin and Ethereum funds saw significant capital outflows, indicating investor concern.
The Continuing Role of Institutional Investors
Despite the initial pressures from tariffs, blockchain analysis shows continued investment accumulation by institutional investors. This behavior suggests long-term confidence in Bitcoin as a hedge against economic volatility. Institutions appear to be benefiting from the current price declines.
Even with significant withdrawals from cryptocurrencies, past inflows indicate continued institutional interest, reflecting complex but resilient market dynamics.
Bitcoin Outlook and Tariff Impact
While the market remains volatile, on-chain data and technical analysis suggest that Bitcoin may remain resilient in the face of these fluctuations. Continued political and economic influences may strengthen Bitcoin’s appeal as an alternative to digital gold.
Political developments may contribute to Bitcoin’s appeal to investors seeking safer assets amid rising risks in traditional markets. The interplay between economic policy and market sentiment will be a crucial factor in determining Bitcoin’s future in the coming months.
Global Economic Impacts: Lessons from the Past
Trump’s 2025 tariffs recall events similar to those of the 1930s. The imposition of tariffs at the time, through the Smoot-Hawley Act, contributed to deepening the Great Depression as a result of retaliatory trade wars.
Bitcoin’s growing correlation with traditional financial markets reflects a shift in the role of digital currencies, making them vulnerable to sell-offs due to global economic concerns.
Tariffs and a Potential Recession
On April 2, 2025, Trump announced the imposition of comprehensive tariffs on imports, reflecting behavior similar to the Smoot-Hawley Act of 1930. This move could disrupt global trade and trigger retaliatory responses from other countries, contributing to a global economic downturn.
Meanwhile, stock markets were negatively impacted, with S&P 500 futures falling 3.5%. Demand for safe-haven assets such as gold and the Japanese yen surged, reflecting investor concerns.
The Impact of Tariffs on Bitcoin: Volatility and Potential Upside
Amid these economic concerns, Bitcoin could come under significant downward pressure if the trade war escalates or the global economy enters a recession. However, Bitcoin may remain the preferred instrument for many investors seeking protection against significant economic risks.
If Bitcoin falls below the key support level at $77,700, it could see a sharp correction toward $49,900. This could reflect the severity of the economic situation and trigger further market volatility.
