- Global liquidity increased by $1.69T this week, driven by a weakening DXY, yet Bitcoin has not reacted to the shift.
- Historical trends show Bitcoin typically follows liquidity growth within three to four months, as seen in 2019 and 2022 market conditions.
- US policies focus on long-term restructuring, with fiscal spending cuts, lower interest rates, and refinancing strategies shaping future economic trends.
Global liquidity trends capture market attention as the weakening US Dollar Index influences economic conditions and Bitcoin remains unresponsive to rising liquidity. Historical patterns suggest a lagged reaction in Bitcoin after such liquidity shifts.
Global Liquidity Trends and Bitcoin’s Reaction
Alpha Extract tweeted that global liquidity is rising due to a weakening DXY. Their model shows liquidity growth amid broader market trends. The data reveals liquidity increased in recent weeks. The tweet notes that factors beyond the DXY are driving the sell-off.
In late 2019 and 2022, liquidity rose while Bitcoin dropped amid broader risk concerns. Historical records indicate Bitcoin typically reacts within three to four months after such divergences. The market has seen similar patterns during previous cycles. These trends suggest potential adjustments in Bitcoin’s price once liquidity catches up.
Source: X/Alpha Extract US Economic Environment and Market Adjustments
The US market shows growing bearish sentiment as the administration prioritizes long-term restructuring over short-term gains. Fiscal spending cuts and mass layoffs contribute to current economic challenges. The government’s focus on long-term success is evident in its policy adjustments.
Market figures like Trump, Bessent, Elon, and Lutnick point to upcoming short-term economic pain. Their views emphasize lower interest rates and a refinancing strategy at reduced yields. Bessent stated, “The Trump economy begins in 6–12 months.” These statements reflect a focus on long-term economic recovery.
The market monitors political and economic announcements closely. Recent measures suggest that restructuring efforts may continue over the coming months. Investors remain attentive to data on fiscal spending and employment trends.
Liquidity Increase and Crypto Outlook
The Global Liquidity Index Update reported a $1.69T increase this week, marking a 1.30% rise. The three-month rate of change now exceeds the 12-month rate, forming a potent momentum signal.
Bitcoin remains under risk-off pressure, yet it historically aligns with liquidity trends over time. A stronger economy combined with rising liquidity tends to benefit Bitcoin in the long run. The crypto market awaits adjustments as liquidity factors influence future trends.
Crypto enthusiasts consider liquidity trends a vital market metric. This update encourages closer monitoring of Bitcoin as liquidity increases shape market behavior.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
