Bitcoin Drops 8.5% as US Tariffs Spark 2022 Bear Market Fears
1min read Bitcoin (BTC) is currently facing conditions similar to the 2022 bear market bottom as US business outlook reflects a "very high risk" scenario. Charles Edwards, the founder of quantitative Bitcoin and digital asset fund Capriole Investments, has highlighted the potential impact of higher-than-expected US tariffs on Bitcoin. On April 2, when President Donald Trump announced worldwide reciprocal trade tariffs, Bitcoin reacted noticeably worse than US stocks. BTC/USD fell up to 8.5% on the day, while the S&P 500 managed to end the trading session 0.7% higher.
Edwards noted that US business expectations reflect the type of uncertainty seen only three times since the turn of the millennium. The Philadelphia Fed’s Business Outlook Survey (BOS) is showing expectations comparable to 2000, 2008, and 2022. 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.
Ask Aime: What impact does the current Bitcoin market have on the US business outlook?
In Capriole’s latest market update on March 31, Edwards acknowledged that BOS data can produce unreliable signals over market sentiment but argued that it should not be ignored. He wrote, “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. 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.”
As for the US liquidity trend, 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. Edwards queried, “How long until the Powell printer starts humming?” M2 money supply, meanwhile, is due for an “influx” — something which has historically spawned major BTC price upside. Popular analyst Colin Talks Crypto predicted in an X thread this week, “The BIG take-away (the most important observation) is that a big M2 influx is coming. The exact date is less important.” A comparative chart hinted at a potential BTC price rebound by the start of May.
