What To Expect From BTC Price Once Tariff Tantrums Get Over

The first three months of 2025 have certainly been quite the roller coaster for BTC price action.

Crypto investors seem to be riding on the early year gains. So much so, that it has forced investors to zoom out and look at the broader picture. Especially from a Bitcoin cycles point of view.

A recent CryptoQuant analysis suggests that BTC price action could currently be in the tail end of the early bull cycle. This analysis was based on the ratio of Bitcoin trading volumes between the last 6 to 12 months.

The same analysis suggests that Bitcoin might be gearing up for another rally to the cycle peak. The bullish stage of the cycle is typically characterized by high demand, major news and institutional adoption.

The post-halving demand, ETF approvals and governments jumping on the same roller coaster are highlights of the latest bullish stage. The distribution stage will follow after the peak, which will be the distribution phase characterized by sell-offs from early buyers.

Will tariffs shift the Bitcoin cycle dynamic and influence BTC price action?

The impact of tariff wars on BTC price action was evident over the last few weeks and could continue indefinitely. This is because analysts recently warned that the inflation and a recession will likely be the subsequent aftermath of the tariffs.

Recessions are usually characterized by higher interest rates and low liquidity especially for risk-on markets. This puts Bitcoin within the cross-hairs of a recession, meaning Bitcoin too could experience liquidity flows under such circumstances.

The threat of a recession therefore raises questions as to whether the Bitcoin cycles movement will remain intact, or the current bull cycle will be cut short.

The markets may not always play by the books and inflationary conditions in the U.S could therefore limit liquidity flows. However, there are a myriad of other factors that could influence Bitcoin along the way.

Should Bitcoin investors brace for wild times ahead?

It could take a while before the full effects of the tariff wars are felt across the market especially in the U.S. It is however worth noting that demand outside the U.S may continue growing.

Speaking of demand, the tariff wars were a surprising outcome. It triggered bearishness at a time when the market anticipated a bullish performance. It would not be surprising if some unexpected bullish news hits the market sometime soon, potentially triggering an unexpected rally.

Such an outcome could make it possible for the bullish phase of the cycle to continue and conclude with a new cycle peak. However, that outcome would likely require a major catalyst to trigger the rally.

Many analysts anticipate Bitcoin adoption by governments to be the trigger that fuels the next major bullish outcome.

Trump’s administration previously hinted at the possibility that it would create a Federal Bitcoin stock pile. However, that announcement has yet to grace the market.

Bitcoin’s bearish performance in March saw its marketcap dip drop as low as $1.55 trillion. As a result, BTC price held on above $78,000. This confirmed that there was about $210 billion worth of liquidity from November that remained within the cryptocurrency.

The $210 billion signals that the investors behind that liquidity still anticipate more upside for the cycle hence the decision not to take profits off the table.

If the next phase of institutional and government adoption takes off, then the liquidity that could flow into Bitcoin might be larger than or on par with the numbers it delivered in 2024. Especially if the U.S goes all in on Bitcoin.

Note that all these different scenarios are merely hypothetical. A myriad of factors could influence the market outcome and BTC price action in Q2 and the second half of 2025.

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