Bitcoin (BTC) may be navigating one of the most pivotal moments of 2025, with its price trajectory increasingly tied to macroeconomic shifts in the United States. Despite recent setbacks triggered by unexpected global trade tariffs, market analysts suggest that BTC could still rebound—potentially targeting the $71,000 level—if favorable liquidity conditions return.
As geopolitical trade tensions ripple through financial markets, Bitcoin’s role as a hedge against macroeconomic uncertainty is being put to the test once again. With traditional risk assets reacting unevenly and U.S. business sentiment declining to levels not seen since past economic turning points, investors are closely watching key indicators that could signal a resurgence in digital asset demand.
Tariff Shockwaves Impact Bitcoin’s Bull Run Attempt
The latest attempt at reigniting a sustained Bitcoin bull market has hit a roadblock—unexpectedly high U.S. trade tariffs. Following former President Donald Trump’s announcement of reciprocal global tariffs on April 2, Bitcoin experienced a sharp intraday drop of up to 8.5%. This contrasted starkly with the S&P 500, which closed the same session up 0.7%, highlighting a growing divergence between crypto and traditional equities.
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This reaction underscores Bitcoin’s sensitivity to macroeconomic policy shifts, especially those affecting inflation expectations and global liquidity flows. While BTC has historically positioned itself as a store of value amid financial instability, short-term volatility remains pronounced when geopolitical risks escalate.
Charles Edwards, founder of Capriole Investments and a respected voice in quantitative digital asset analysis, pointed to the latest Philadelphia Fed Business Outlook Survey (BOS) as a red flag for broader economic health—and by extension, risk assets like Bitcoin.
“The current BOS reading reflects a level of uncertainty last seen during pivotal downturns: 2000, 2008, and 2022,” Edwards noted on X. “We’re now in a zone of very high risk.”
A Rare Economic Signal Reappears
The BOS index—a gauge of regional manufacturing sentiment—has dipped below 15 for the first time since early 2024. Notably, this threshold was also breached during previous market stress periods, including late 2022, when Bitcoin bottomed around $15,600 amid a prolonged bear market.
While Edwards acknowledges that the BOS is not a perfect predictor and can generate false signals, he emphasizes its historical relevance: “Even with potential noise, readings this low have preceded major economic inflection points. We should remain highly alert.”
“Particularly if the tariff conflict escalates beyond current expectations or corporate earnings begin to erode.”
Such conditions could suppress investor appetite for speculative assets in the near term. However, they may also lay the groundwork for a stronger rebound if policymakers respond with accommodative measures.
Key Price Levels: $91,000 Breakout or Retreat to $71,000?
Capriole Investments has identified two critical thresholds for Bitcoin’s next directional move:
- A daily close above $91,000 would confirm renewed bullish momentum.
- Conversely, a pullback toward $71,000 could present a high-probability rebound zone.
These levels are not arbitrary—they reflect confluence points derived from long-term technical structures and on-chain valuation models. A decisive break above $91,000 would likely signal that macro headwinds are easing and institutional demand is reaccelerating.
On the other hand, should downward pressure persist due to tightening liquidity or prolonged trade tensions, the $71,000–$73,000 range offers strong historical support based on previous accumulation zones and miner cost bases.
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Liquidity Trends Could Determine Bitcoin’s Fate
One of the most powerful drivers behind past Bitcoin bull runs has been expanding global liquidity—particularly increases in the U.S. money supply. Now, signs point to a potential resurgence in monetary expansion.
The Federal Reserve has begun signaling a pivot away from its restrictive monetary stance, fueling speculation about an eventual return to quantitative easing (QE). While official policy shifts remain cautious, financial markets are increasingly pricing in looser conditions ahead.
Colin Talks Crypto, a well-known macro-focused analyst, recently highlighted an impending surge in M2 money supply—a metric that has historically preceded major BTC rallies.
“The key insight is that a large M2 spike is coming. The exact timing matters less than the directional trend.”
A chart comparing U.S. M2 growth with BTC/USD performance suggests that by early May 2025, increasing liquidity could catalyze upward momentum in Bitcoin prices. If this pattern holds, even current headwinds from tariffs might be overshadowed by a wave of capital seeking yield alternatives.
Why M2 Matters for Crypto Investors
M2 represents the broadest measure of money supply available to consumers and businesses, including cash, checking deposits, savings accounts, and retail money market funds. When M2 grows rapidly—especially during periods of low interest rates—it often leads to:
- Increased risk-taking in financial markets
- Inflation hedging behavior
- Greater allocation to non-traditional assets like cryptocurrencies
Historically, every major Bitcoin rally—from 2013 to 2017 and again from 2020 to 2021—was preceded by significant M2 expansion. The upcoming surge could follow a similar playbook.
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Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop after the new U.S. tariffs were announced?
A: Tariffs can increase economic uncertainty and reduce business investment, leading investors to de-risk portfolios temporarily. Bitcoin, despite its potential as a hedge, often reacts short-term like other risk assets during sudden macro shocks.
Q: What does the Philadelphia Fed BOS index tell us about Bitcoin?
A: The BOS measures regional business confidence. Readings below 15 have historically coincided with economic stress periods—such as 2000, 2008, and 2022—when Bitcoin later found strong support or began new bull phases after initial volatility.
Q: Is $71,000 a strong support level for Bitcoin?
A: Yes. This level aligns with prior accumulation zones, miner breakeven costs, and on-chain valuation metrics like realized price. It has served as a reliable floor in previous corrections.
Q: How does M2 money supply affect Bitcoin prices?
A: Rising M2 typically increases liquidity in the financial system, encouraging investors to seek higher returns outside traditional savings vehicles. Bitcoin often benefits as a decentralized alternative store of value.
Q: Could the Fed restart quantitative easing in 2025?
A: While no formal QE program has been announced, growing speculation and market positioning suggest that rate cuts and balance sheet reinvestment could begin mid-year if inflation continues moderating.
Q: What would confirm a new Bitcoin bull market?
A: A daily close above $91,000—combined with rising trading volume and improving macro conditions—would be a strong technical confirmation of renewed bullish momentum.
With macroeconomic crosscurrents intensifying, Bitcoin stands at a critical juncture. While trade tensions pose near-term risks, expanding liquidity and strong technical foundations suggest that the long-term outlook remains constructive. Investors who monitor both policy shifts and key price levels will be best positioned to navigate what could be a defining year for digital assets.