Bitcoin investors are eyeing a potential price boost as the US debt suspension period comes to an end on March 14, injecting fresh liquidity into the markets. While global trade tensions still pose risks, the return of government spending could be the trigger for Bitcoin’s next rally.

The Debt Ceiling Suspension and Bitcoin’s Recent Performance

The US Treasury officially hit its staggering $36 trillion debt ceiling on January 20, the day after former President Donald Trump’s inauguration. A “debt issuance suspension period” was put in place, lasting until March 14. During this two-month stretch, Bitcoin’s price took a notable hit, plummeting 22% from over $106,000 on January 21 to around $82,535 as of March 12, according to TradingView data.

With the suspension period ending, analysts expect a surge in government spending to increase market liquidity, potentially fueling Bitcoin’s next rally. Ryan Lee, chief analyst at Bitget Research, suggests that the influx of cash into financial markets could drive higher demand for stocks and cryptocurrencies. “In such periods, we can expect a boost in overall momentum, although many other factors are important to note,” he explained to Cointelegraph.

Short-Term vs. Long-Term Outlook

While increased liquidity could offer short-term relief for Bitcoin, other macroeconomic factors remain at play. Inflation concerns, interest rate policies, and geopolitical instability could still introduce volatility, Lee warned. The recent White House Crypto Summit also raises speculation that some of this new liquidity could flow directly into cryptocurrencies.

Aleksei Ponomarev, co-founder and CEO of J’JO, a crypto index investing firm, echoed this sentiment. He believes liquidity surges typically favor risk assets like Bitcoin but sees the effect as temporary. “While the liquidity surge will undoubtedly drive market price movement, it is limited to short-term impact. The long-term trajectory of Bitcoin remains tied to institutional investments, ETF growth, and regulatory clarity.”

Potential Short-Term Correction and Future Growth

Despite the optimism surrounding liquidity inflows, Bitcoin may still face a potential short-term correction. Analysts suggest that its right-hand side (RHS) bid price could dip as low as $70,000 by the end of the debt suspension period, given its correlation with global liquidity indices. However, this dip may be short-lived.

Jamie Coutts, chief crypto analyst at Real Vision, predicts that growing money supply could push Bitcoin’s price above $132,000 by the end of 2025. Looking even further ahead, most experts anticipate Bitcoin could reach between $160,000 and $180,000 by late 2025, assuming favorable macroeconomic conditions.

Trade Tariffs and Their Potential Impact on Bitcoin

While increasing liquidity is a bullish sign for Bitcoin, global trade tensions could introduce headwinds. James Wo, founder and CEO of venture capital firm DFG, warns that tariffs and their delayed economic impact could affect inflation rates and monetary policies. “Higher import costs and reduced corporate margins are likely to push inflation higher, forcing central banks to keep interest rates elevated for longer under a restrictive monetary policy,” he noted.

The European Union’s retaliatory tariffs on March 12 add another layer of uncertainty, potentially driving Bitcoin below $75,000 in the short term. Given that Europe accounts for over $1.5 trillion in annual US exports, economic shifts in the region could have significant ripple effects across global financial markets, including Bitcoin.

The Road Ahead for Bitcoin

Despite these short-term concerns, the overall sentiment for Bitcoin remains optimistic. With institutional adoption increasing and regulatory clarity improving, many analysts believe Bitcoin is poised for substantial long-term growth. While short-term fluctuations are inevitable, the broader trend suggests that Bitcoin’s value proposition continues to strengthen in an evolving financial landscape.

As March 14 approaches, all eyes will be on how the market reacts to the end of the US debt suspension. Will it be the catalyst that reignites Bitcoin’s rally? Time will tell, but one thing is certain: Bitcoin remains at the center of global financial discussions.