Bitcoin Faces 70% Odds of a Market Dip Amid April Tariff Fears, Nansen Warns
Bitcoin (BTC) and the broader cryptocurrency market are facing heightened uncertainty as they approach April. Nansen analysts predict a 70% chance that Bitcoin could experience another price drop following the upcoming tariff-related announcements from the U.S. government. The risk comes amid growing concerns over trade policy uncertainty, which has already shaken market sentiment in recent months.
As tariffs loom large, many investors are preparing for the possibility of further volatility in the crypto market. Here’s an in-depth look at the potential risks ahead, as well as the outlook for Bitcoin’s price and the broader market.
The Tariff Threat: April 2 Marks a Key Moment for Bitcoin and the Markets
Bitcoin has been struggling to maintain upward momentum, and the risk of tariffs is adding more uncertainty to the equation. President Donald Trump recently indicated that new tariffs will be rolled out on April 2, setting the stage for potential volatility in the global markets. The situation raises concerns that Bitcoin, along with traditional assets, could see another dip following the correction observed in March.
Nansen’s analysts suggest that the odds of a price drop in the weeks after April 2 stand at 70%. They believe that tariff-related uncertainties will likely trigger another round of market volatility, negatively impacting investor sentiment and causing Bitcoin prices to dip further. However, Nansen also sees this correction as part of a larger, ongoing bull market for Bitcoin, potentially providing a buying opportunity for those looking to accumulate during the dip.
Bitcoin’s Potential Recovery: Why Analysts Are Still Bullish Long-Term
While the short-term outlook remains shaky, there’s room for optimism for Bitcoin investors. According to Aurelie Barthere, a principal research analyst at Nansen, the market is likely to stabilize after the initial dip, setting the stage for a recovery in the latter half of 2025.
In her base scenario, Barthere expects a second correction to take place after April 2, which would lead to a local bottom in mid-March. After this, Bitcoin’s price could begin to recover and continue its long-term upward trajectory. Barthere attributes this recovery potential to a supportive macroeconomic environment, including the growing adoption of cryptocurrencies in the U.S. and a lack of recession signals.
“There’s a 70% subjective likelihood that Bitcoin will see another leg down after April 2,” Barthere said in a recent interview with crypto.news. “After this correction, I expect Bitcoin to bottom out for the rest of the year, with the market continuing to trend upwards toward new highs.”
Is the Bull Market Still Alive? Understanding Bitcoin’s Resilience
Despite the risk of a correction, Nansen remains confident that Bitcoin is still in a bullish market. A major factor supporting this optimistic view is the ongoing regulatory progress for cryptocurrencies in the U.S. As more institutional investors show interest in Bitcoin and the broader crypto market, the foundation for a prolonged bull market seems to be solidifying.
Furthermore, U.S. economic data suggests that while growth has slowed down, there are no immediate signs of a recession. Nansen’s report highlights that the U.S. real GDP growth has slowed but is not yet showing signs of a bear market. This is a positive sign for Bitcoin, as periods of economic growth tend to support higher-risk assets like cryptocurrencies.
“The U.S. economy is slowing, but it’s not flashing recession signals,” Barthere added. “That’s why I believe we’re in a crypto bull market, even though we’ve seen some corrections.”
Market Sentiment: Tariff Fears and Crypto Volatility
The ongoing trade policy uncertainty surrounding tariffs has been one of the key drivers of volatility in both the traditional and crypto markets. The U.S. Economic Policy Uncertainty Index has reached new highs, with tariff discussions taking center stage in investor anxiety.
However, there may be light at the end of the tunnel. Treasury Secretary Bessent has noted that many U.S. trading partners are already negotiating to lower their trade barriers, which could ease some of the fears surrounding tariffs. Additionally, President Trump has hinted at the possibility of tariff exemptions, which could provide a more favorable outlook for the markets.
Despite these positive developments, Barthere and her team at Nansen believe that uncertainty will persist into the second quarter of 2025. This uncertainty could contribute to further short-term corrections in Bitcoin and other cryptocurrencies, but Nansen believes the market will rebound after this phase.
Looking Ahead: What Investors Should Watch for in April
The coming weeks are critical for Bitcoin and the broader market. Investors should be cautious as April 2 approaches, keeping a close eye on tariff developments and trade policy announcements. Nansen’s analysts suggest that while another dip in Bitcoin prices is likely, it may represent a buying opportunity for long-term investors.
The market’s resilience in the face of uncertainty will be key. Nansen points to the growing institutional interest in Bitcoin and the cryptocurrency space, as well as the positive developments in regulatory frameworks in the U.S. These factors suggest that even if Bitcoin faces short-term volatility, the long-term outlook remains bullish.
Key things to watch for in the coming weeks include:
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Tariff Announcements: The potential impact of President Trump’s new tariffs on April 2.
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Regulatory Developments: Progress on cryptocurrency regulation in the U.S. and the growing institutionalization of the market.
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Economic Data: Signs of a potential recession or further economic slowdown in the U.S.
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Bitcoin Price Action: How Bitcoin reacts to any short-term corrections and whether it starts to recover toward its all-time highs.
Volatility in the Short-Term, Bullish in the Long-Term
Bitcoin’s price may be set for another short-term correction due to tariff fears and trade policy uncertainty. Nansen’s analysts have placed the odds of a dip at 70%, which could take place after April 2. However, after this correction, Bitcoin is expected to bottom out and resume its bullish trajectory, supported by a favorable macro environment and growing adoption.
Investors should remain cautious in the short term, as tariff-related news and economic uncertainty may continue to create volatility. However, the long-term outlook for Bitcoin remains positive, with the potential for the market to continue growing in the latter half of 2025. As always, investors should closely monitor market developments and adjust their strategies accordingly.
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