As we enter Q2 2025, the crypto market finds itself experiencing some geopolitical headwinds and an incredible amount of uncertainty.

In this post, I’ll lay out a macro thesis to interpret where crypto might be headed over the next three months and how to navigate these highly volatile investments.

We will analyse global liquidity, central bank policy, inflation trends, and geopolitical risks such as Trump’s tariff negotiations. Let’s zoom out before we zoom in.

Spotting macro trends

First, we need to understand how to spot these trends and the different mechanics that move the crypto market.

Bitcoin is widely regarded as an inflation hedge akin to digital gold; however, it also behaves as a leveraged tech/Nasdaq bet on shorter time horizons.

This means that risk-on environments are needed for Bitcoin and Crypto to outperform other assets.

Risk-on environments are produced by investors seeking riskier investments and trades by going further along the risk curve.

Traders do this when macroeconomic factors such as central bank policy come into play, such as reducing interest rates, which makes debt cheaper, and this therefore increases liquidity.

In other words, inflation or currency debasement…

This is an oversimplified way of explaining this, but it will do for now.

Investor Sentiment

Okay, so macroeconomic trends and central bank policy are the first to watch.

Second, we have sentiment, which is investors' appetite at any given moment.

This will tell you whether you are early or late to a trade.

If your taxi driver tells you that Fartcoin is the next Bitcoin, it is probably time to exit all crypto markets!

You want to buy when everyone else is selling and sell when everyone else is buying—the masses, retail, are the ones who always get left holding the bag.

A few ways to spot sentiment are through tools such as the Fear and Greed Index, Google Trends, and various on-chain data signals, which I won’t elaborate on today.

Also, just check your own emotions. How does it feel to invest today? Is it painful, or is it easy?

If it's the former, then it’s probably the right time to do so.

Next, we have technical analysis…

Technical Analysis

This is the third and least important tool for investing in markets.

Technical analysis is essentially a manifestation of sentiment in chart form and will create a picture of how the market ‘feels’.

This is great for much shorter time horizons and timing entries and exits.

The Thesis

Quick sidenote, When I talk about Bitcoin I am also talking about Crypto generally as altcoins follow Bitcoins price action and essentially act as Bitcoin on leverage.

Financial conditions lead risk assets such as Crypto by a couple of months, which is why we saw the recent pullback in Bitcoin and Crypto more widely as financial conditions tightened in Q4 2024 (bearish for Bitcoin).

Following this in Q1 this year, financial conditions eased considerably (bullish for Bitcoin).

This can be seen by looking at the US dollar, which has fallen off a cliff since the turn of the year, with $DXY down 10%.

Despite this, Bitcoin has also retraced back to the $70ks.

This is the lag that I have been discussing above. As you can see in the DXY chart above, it rallied into year-end 2024, but this did not affect Bitcoin until Q1 2025.

Now, we are seeing the inverse as the DXY falls below 100, which is one data point to include in your macro analysis for the Bitcoin bull market to continue in its macro uptrend.

We called the bottom on X on March 10th at around $77k.

Bitcoin has since rallied to $94k and, in our opinion, is going much higher.

So, let’s continue the analysis. Why would Bitcoin go higher from here?

Global liquidity is the next key chart and main macro driver of Bitcoin (and Crypto).

What you can see here is the Bitcoin price laid over the top of Global M2 (liquidity) and just how correlated the two charts are.

As discussed earlier, liquidity is just another word for inflation or currency debasement, which plays into the Bitcoin inflation hedge narrative. This is why when we see liquidity rise, Bitcoin rises with it.

This is a chart that shows liquidity with a 12-week lead and what it shows is global liquidity explode higher.

If Bitcoin remains correlated, which seems highly likely, we should see it approach $140,000 over the next 12 weeks.

The next part of the puzzle is central bank policy.

The markets have priced in three interest rate cuts this year, which are generally seen as a bullish event for risk-on assets such as Bitcoin, as debt becomes cheaper and capital flows out of treasuries and into riskier investments.

The Fed has said that they are taking a data-driven approach when deciding to cut rates.

The two key metrics they watch are inflation and jobless claims. They typically target a 2% inflation rate yearly and may be encouraged to cut if jobless claims increase, as this would indicate weakness in the economy and the need to stimulate through debt.

Inflation is trending well below the targeted 2%, another sign that the Fed will indeed cut sooner rather than later.

As for jobless claims, these are expected to rise with the consequence of Elon Musk’s DOGE starting to show up in the jobs data.

Both will encourage the Fed to cut, triggering another wave of capital to enter the Bitcoin and Crypto markets.

The last point to make as part of this thesis is the Trump Tariffs, which have been headline news over the last weeks.

These have now been priced in, and therefore, any news from this point onwards is likely to be good news and a catalyst for price action, not a hindrance.

So, to summarise, we have:

• Easing financial conditions with a sharp sell-off in the dollar

• Global liquidity is rising, increasing Bitcoin’s relevance as an inflation hedge

• Inflation and Jobless claims are allowing the Fed to cut rates as expected, which in turn will lead to a risk-on environment

• Trump’s Tariffs are priced I,n and any news from this point onwards will be good news

To answer the article's question of where we will be in 12 weeks, my answer… higher… a lot higher.