Two Potential Post-Tariff Scenarios

Key Takeaways

Tariffs are coming April 2nd with the full extent of the impact not understood until May
Bullish recovery for BTC is possible with a diagonal iH&S pointing to an ATH retest
The bearish continuation possibility could bring price below $70k once again

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Digital Asset Commentary

As the quarter comes to a close, investors and traders remain highly focused on the ongoing tariff developments dominating the market. A significant amount of uncertainty should be resolved once the official tariff announcements are made on April 2nd. While bearish expectations may already be priced in, the risk of a global tariff trade war could drive markets lower. Given Bitcoin's strong correlation with the U.S. tech sector, it would likely follow suit. However, BTC has shown some relative outperformance in recent weeks, as reflected in the IBIT/QQQ, IBIT/MAGS, and IBIT/IGV pairs.

After breaking below the $94K range in February, BTC has once again consolidated within a broad trading range. Two potential outcomes for Q2 are emerging, with greater clarity expected after April 2nd.

The first scenario is a bullish reversal, characterized by an inverted head and shoulders pattern. This formation consists of an extreme low flanked by two higher lows, with a diagonal neckline acting as resistance around $87K. If confirmed, this pattern suggests a potential move toward an ATH retest at $108k. Key levels to watch for confirmation include holding the yearly pivot at $80K, reclaiming bullish territory on the Cloud above $90K, and surpassing the 20-WMA at $94K.

The second scenario is bearish continuation, which, based on current price positioning relative to trend metrics, appears more probable. A downward range expansion could lead to a target zone of $61K–$67K, based on Fibonacci extensions. Additionally, the volume profile from 2024’s multi-month consolidation suggests support at $63K and $67K. A break below $70K would likely signal the end of the current bullish cycle, necessitating either an extended consolidation or further downside before a new uptrend can develop.

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