A modest bitcoin rally to a possible challenge of the $86,000 level quickly reversed during U.S. afternoon trading hours on Wednesday as Federal Reserve Chairman Jerome Powell warned on the effects of President Trump’s tariff regime.

“The level of the tariff increases announced so far is significantly larger than anticipated,” said Powell in a speech. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”

In other words, stagflation — a throwback to a sizable portion of the 1970s when the U.S. experienced weak economic activity alongside double-digit inflation.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” continued Powell.

The price of bitcoin (BTC) fell about 2.5% in the minutes following the Powell remarks, now trading at $83,700, down 1.5% over the past 24 hours.

U.S. stocks, which had been trying to mount a comeback from opening declines, also were hit, the Nasdaq slumping 3.4% to a session low.

Powell also mentioned that as crypto is becoming more mainstream, there’s a need for a legal framework for stablecoins. He said that banking regulation around crypto will likely be “partially relaxed.”

The U.S. Senate Banking Committee cleared a bill to regulate stablecoin issuers in March, marking the first committee approval and a significant step closer to law in the U.S.

Hawkish Fed weighs on crypto and BTC

“Powell came out extremely hawkish,” Quinn Thompson, chief investment officer of hedge fund Lekker Capital, said in a Telegram message. It’s notable that Powell downplayed last week’s market turmoil characterizing it as “orderly market functioning,” he added.

“I would have at least expected him to give a nod to the elevated volatility and ruptures forming in the treasury market but he did not do that,” Thompson said.

Powell’s tone suggests that investors should temper their expectations for rate cuts in the upcoming meetings, said Thompson, which could weigh on risk assets including crypto.

“It appears a May cut is firmly off the table barring Fed intervention for bad reasons and I wouldn’t say June is a lock either,” concluded Thompson. “The bull case for crypto and bitcoin specifically is liquidity and policymaker intervention. Both of those seemed very far off based, so it’s difficult for me to paint a constructive picture in the immediate term.”

UPDATE (April 16, 18:40 UTC): Adds additional comments made by Chair Powell about stablecoins. Adds analyst comment.

Bitcoin’s price trajectory is once again capturing headlines, and this time the catalyst appears to be global liquidity trends reshaping investor sentiment. In a recent comprehensive breakdown, Matt Crosby, Lead Analyst at Bitcoin Magazine Pro, presents compelling evidence tying the digital asset’s renewed bullish momentum to the expanding global M2 money supply. His insights not only illuminate the future of Bitcoin price but also anchor its macroeconomic relevance in a broader financial context.

Bitcoin Price and Global Liquidity: A High-Impact Correlation

Crosby highlights a remarkable and consistent correlation—often exceeding 84%—between Bitcoin price and global M2 liquidity levels. As liquidity increases across the global economy, Bitcoin price typically responds with upward movement, although with a noticeable delay. Historical data supports the observation of a 56–60 day lag between monetary expansion and Bitcoin price increases.

This insight has recently proven accurate, as Bitcoin price rebounded from lows of $75,000 to above $85,000. This trend closely aligns with the forecasted recovery that Crosby and his team had outlined based on macro indicators, validating the strength and reliability of the correlation driving Bitcoin price upward.

Why the 2-Month Delay Impacts Bitcoin Price

The two-month delay in market response is a critical observation for understanding Bitcoin price movements. Crosby emphasizes that monetary policy and liquidity injections do not immediately affect speculative assets like BTC. Instead, there is an incubation period, typically around two months, during which liquidity filters through financial systems and begins to influence Bitcoin price.

Crosby has optimized this correlation through various backtests, adjusting timeframes and offsets. Their findings indicate that a 60-day delay yields the most predictive accuracy across both short-term (1-year) and extended (4-year) historical Bitcoin price action. This lag provides a strategic advantage to investors who monitor macro trends to anticipate Bitcoin price surges.

S&P 500 and Its Influence on Bitcoin Price Trends

Adding further credibility to the thesis, Crosby extends his analysis to traditional equity markets. The S&P 500 exhibits an even stronger all-time correlation of approximately 92% with global liquidity. This correlation strengthens the argument that monetary expansion is a significant driver not just for Bitcoin price, but also for broader risk-on asset classes.

By comparing liquidity trends with multiple indices, Crosby demonstrates that Bitcoin price is not an anomaly but part of a broader systemic pattern. When liquidity rises, equities and digital assets alike tend to benefit, making M2 supply an essential indicator for timing Bitcoin price movements.

Forecasting Bitcoin Price to $108,000 by June 2025

To build a forward-looking perspective, Crosby employs historical fractals from previous bull markets to project future Bitcoin price movements. When these patterns are overlaid with current macro data, the model points to a scenario where Bitcoin price could retest and potentially surpass its all-time highs, targeting $108,000 by June 2025.

This optimistic projection for Bitcoin price hinges on the assumption that global liquidity continues its upward trajectory. The Federal Reserve’s recent statements suggest that further monetary stimulus could be deployed if market stability falters—another tailwind for Bitcoin price growth.

The Rate of Expansion Affects Bitcoin Price

While rising liquidity levels are significant, Crosby stresses the importance of monitoring the rate of liquidity expansion to predict Bitcoin price trends. The year-on-year M2 growth rate offers a more nuanced view of macroeconomic momentum. Although liquidity has generally increased, the pace of expansion had slowed temporarily before resuming an upward trend in recent months.

This trend is strikingly similar to conditions observed in early 2017, just before Bitcoin price entered an exponential growth phase. The parallels reinforce Crosby’s bullish outlook on Bitcoin price and emphasize the importance of dynamic, rather than static, macro analysis.

Final Thoughts: Preparing for the Next Bitcoin Price Phase

While potential risks such as a global recession or a significant equity market correction persist, current macro indicators point toward a favorable environment for Bitcoin price. Crosby’s data-driven approach offers investors a strategic lens to interpret and navigate the market.

For those looking to make informed decisions in a volatile environment, these insights provide actionable intelligence grounded in economic fundamentals to capitalize on Bitcoin price opportunities.

For more deep-dive research, technical indicators, real-time market alerts, and access to a growing community of analysts, visit BitcoinMagazinePro.com.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.

Payments-focused XRP’s immediate prospects look bleak, with its price chart flashing a “rising wedge” breakdown.

A rising wedge comprises two converging trendlines that connect higher lows and higher highs. This convergence suggests that upward momentum is weakening. When the price moves below the lower trendline, it signals a shift to a bearish trend.

XRP dived out of its rising wedge pattern during Wednesday’s early Asian hours, suggesting that the attempted recovery from the April 7 lows near $1.60 has likely lost momentum, allowing sellers to regain control.

According to technical analysis theory, analysts should identify the starting point of the rising wedge as the initial support level following the breakdown, which means XRP can now fall back to $1.60. The cryptocurrency has also fallen below the Ichimoku Cloud, a momentum indicator, on the hourly chart, reinforcing the bearish outlook indicated by the rising wedge breakdown.

Tuesday’s high of $2.18 is the level for bulls to beat to invalidate the bearish outlook.