Bitcoin (BTC) is steadfast as the US trade war carries on into mid-April. The recent price movements of BTC are struggling to surpass a longstanding resistance trend line, hindered by trade war anxieties that shape traders’ sentiments. Tariffs remain the primary macroeconomic concern this week, with risk assets on alert for any unexpected developments. Bitcoin ETFs experienced nearly $800 million in losses over the past week, whereas some strategies indicate purchases amid the downturn. Despite the pressure from tariffs, the declining value of the US dollar could surprisingly benefit Bitcoin and other riskier assets. The global M2 money supply is currently at historic highs and continues to rise—will Bitcoin mirror its historical patterns?
Traders are closely monitoring BTC price resistance levels. Last week, BTC/USD registered a 6.7% increase, as confirmed by data from various market sources. However, the real challenge lies ahead—overcoming a downward trend line that has limited gains for several months.
“Rejected at key resistance while precisely following the trendline,” a prominent trader shared online. “If the decline persists, keep an eye on the $70K-$72K support zone for a potential rebound.”
Another trader also noted that although Bitcoin has closed above the downtrend line, true breakout confirmation is still in the works. “Bitcoin has made a daily close above the downtrend, so breakout confirmation is in progress,” he mentioned to his followers. “However, remember Bitcoin has previously managed to close above the downtrend yet failed to hold during retests. The current retest is critical.”
Meanwhile, a popular trader outlined varying price targets for Bitcoin based on the results of testing the trend line. “Bitcoin could rise to $88K—but don’t get too hopeful,” he warned. “It could just be a false breakout, capturing liquidity before dipping to $81K for an inverse head and shoulders setup. If that scenario unfolds, $95K-$100K could be on the horizon.”
The discourse around tariffs keeps the markets in a state of anticipation. A quieter week for US economic data has initial jobless claims as a focal point while the ongoing trade war remains a dominant theme. With China being a central focus, crypto and risk assets might witness rapid volatility if more unexpected tariff news arises. Fortunately, there was momentary relief over the weekend when the US President announced a pause on tariffs for key technology products, sending Bitcoin surging to an eleven-day peak above $86,000. However, the news soon suggested the measures would be temporary, leading to renewed pressure on stock futures, while BTC/USD retreated to around $84,000 at the time of writing.
Some analysts expressed that over the weekend’s tariff exemptions were intended only as a stopgap. “The goal was to lower treasury yields before the trade war resumes,” they observed. Initially, markets had interpreted the announcement as a sign of a potential end to the trade war, only to be met with disappointment shortly after.
This volatility, evidenced by the recent outflows from US spot Bitcoin exchange-traded funds (ETFs)—one of the worst weeks since their introduction last year, which saw total outflows surpassing $750 million—reflects market turbulence. Yet, some economists reassure that this outflow, while significant, barely affects the overall investment landscape that Bitcoin has cultivated over a short span.
Prominent institutional players, such as a well-known business intelligence firm, highlighted their intention to expand their Bitcoin holdings, indicating their ongoing commitment amid market developments. However, doubts remain about Bitcoin’s appeal to institutional investors given the trade war uncertainties. A recent survey revealed a strong preference for gold over Bitcoin as a hedge against volatility.
The ongoing weakness of the US dollar could potentially offer a glimmer of hope for risk-asset traders this week. The trade war has adversely impacted the dollar, which has plummeted against major trading partners and is reportedly nearing three-year lows. Historically, Bitcoin has shown a tendency to rise following significant declines in the dollar’s strength.
In the longer term, Bitcoin bulls may find encouragement in a promising trend linked to global M2 money supply, which is positively correlated with Bitcoin prices. As this figure remains near all-time highs, it could signal an influx of capital into risk assets soon.
Yet, there may be a final opportunity to “buy the dip” before any significant upward movement occurs. The current trend suggests that while M2 will experience a sharp rise, it may take another couple of weeks before a substantial price rebound for Bitcoin is anticipated.
Please note that this article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers are encouraged to conduct their own research before proceeding.