Trade War vs. Record M2 Money Supply: 5 Key Things to Watch in Bitcoin This Week

Bitcoin at a Crossroads Amid Global Trade Turbulence and Monetary Expansion

As the third week of April begins, Bitcoin (BTC) finds itself caught between conflicting macroeconomic forces: the escalating U.S. trade war and a record surge in global M2 money supply. With price action tightening under a long-term downtrend, investor sentiment remains split between caution and cautious optimism.

BTC/USD 1-hour chart. Source:TradingView

From tariff headlines and ETF outflows to bullish macro trends, here are five key factors that could shape Bitcoin’s trajectory this week.

1. BTC Battles a Crucial Downtrend Line

Bitcoin’s price action continues to flirt with a major long-term resistance trend line, one that has capped upward momentum for several months.

Last week, BTC/USD closed with a respectable 6.7% gain, but it still hasn’t decisively broken above the trendline, leaving traders on edge.

“Rejected at key resistance, following the trendline perfectly,” trader Bitbull noted on X.

“If the breakdown continues, eyes on the $70K–$72K support zone for a possible bounce.”

BTC/USD 12-hour chart. Source: Bitbull/X

Rekt Capital, another prominent analyst, highlighted that Bitcoin did close above the downtrend line on the daily chart — but warned that breakout confirmation still hinges on a successful retest.

Meanwhile, trader AK47 offered both upside and downside price scenarios depending on how the trendline plays out:

“$BTC might push to $88K—but don’t get too comfy. Could be a fakeout, grabbing liquidity before dipping to $81K. If that inverse head & shoulders plays out, $95K–$100K isn’t far.”

2. Tariff Drama Fuels Market Uncertainty

The U.S.-China trade war is once again taking center stage, injecting volatility into global markets — and Bitcoin is no exception.

After former President Donald Trump paused sweeping tariffs on tech goods over the weekend, Bitcoin surged past $86,000, hitting 11-day highs. However, the rally was short-lived. Conflicting statements about the duration and scope of the pause sent BTC sliding back toward $84,000.

BTC/USD 1-day chart. Source: Rekt Capital/X

“The goal was to bring Treasury yields back down before resuming the trade war,” wrote The Kobeissi Letter, suggesting the “exemptions” were temporary and aimed at calming bond markets.

This uncertainty, echoed by Mosaic Asset, is adding a binary risk component to trading:

“Signs of tensions fuel downside, while easing sends stocks and BTC up. It’s unpredictable and emotionally driven.”

With no major U.S. economic data due this week aside from jobless claims, traders are hyper-focused on tariff headlines that could emerge at any time.

3. ETF Outflows Send Mixed Signals

Last week marked one of the worst on record for U.S. spot Bitcoin ETFs, with net outflows exceeding $750 million, a clear sign of investor caution in light of macro uncertainty.

BTC/USDT 4-hour chart. Source: AK47/X

However, network economist Timothy Peterson urged calm, pointing out that the drawdown was minor relative to the broader ETF inflow trend since early 2024.

“Over $700 million out, yet it barely registers as a blip,” Peterson noted.

“That’s how big Bitcoin has become. That’s how sticky these investments are.”

Not all institutional players are exiting the market. Strategy, the business intelligence firm formerly known as MicroStrategy, appeared to “buy the dip” over the weekend, as co-founder Michael Saylor teased another accumulation move.

“No Tariffs on Orange Dots,” he joked on X alongside a chart of BTC acquisitions.

S&P 500 1-hour chart. Source:TradingView

Still, Bitcoin’s appeal as a safe-haven asset is facing stiff competition. A Bank of America survey conducted in late March found that:

• 58% of investors favored gold as a hedge,

• 9% chose 30-year Treasury bonds, and

• just 3% backed Bitcoin.

4. Weakening U.S. Dollar Could Support Risk Assets

Another factor playing into Bitcoin’s favor is the weakening U.S. dollar.

US spot Bitcoin ETF balances. Source: Timothy Peterson/X

The U.S. Dollar Index (DXY), which tracks the greenback against a basket of foreign currencies, dropped to three-year lows last week and remains under pressure.

Historically, Bitcoin tends to perform well when the DXY declines — albeit with a lag of 2–3 months.

“I got 99 problems but the DXY ain’t one,” joked Bitcoindata21, pointing out that a previous DXY drop preceded Bitcoin’s bear market bottom in late 2022.

Strategy Bitcoin holdings data. Source: Michael Saylor

Analysts suggest this correlation could set the stage for a medium-term BTC rally, especially if global investors continue to rotate out of fiat currencies into riskier stores of value.

5. Record Global M2 Money Supply Signals Bullish Setup

One of the most bullish indicators this week comes from the global M2 money supply, which has now held all-time high (ATH) levels for three consecutive days, according to crypto analyst Colin Talks Crypto.

M2 is a broad measure of money supply that includes cash, checking, and savings deposits — and it's historically correlated with Bitcoin’s price action.

BoA survey results. Source: The Kobeissi Letter/X

“This is a fantastic sign for what it signals will be coming into risk assets in ~108 days,” he said.

US dollar index (DXY) fractal. Source: Bitcoindata21/X

The idea is that rising M2 eventually spills over into asset markets, including crypto. The last major surge in global M2 preceded Bitcoin’s 2020–2021 bull run, and analysts are now watching for a similar pattern to emerge.

However, Colin cautions that before the rally kicks off, there may be a final dip opportunity around April 16–17, aligning with the expected short-term bleed in M2-adjusted BTC price models.

BTC/USD vs. S&P 500 vs. DXY chart. Source: Bitcoindata21/X

Conclusion: Between Fear and Fundamentals

Bitcoin enters the week standing on uncertain ground. Geopolitical risk from tariff headlines, ETF investor jitters, and a fragile macro environment all weigh on sentiment. But the weak dollar, rising global liquidity, and steady on-chain metrics paint a compelling long-term picture for bulls.

Will Bitcoin break out above the downtrend line and reclaim momentum? Or will the market falter under political volatility and risk aversion?

BTC/USD vs. global M2 supply. Source: Colin Talks Crypto/X

One thing is clear: this week could set the tone for the months ahead.