Liquidity is the "blood" of risk assets. Without a continuous influx of new blood, relying solely on existing funds for speculation is ultimately a zero-sum or even negative-sum game.

Historically, most lasting and significant bull markets in risk assets (stocks, cryptocurrencies, commodities, etc.) have almost always been supported by a substantial improvement in broad liquidity:
1. Large-scale monetary easing by the Federal Reserve/global central banks (QE, rate cuts, monetization of fiscal deficits)
2. Accelerated expansion of bank credit/social financing
3. Simultaneous resonance of risk appetite and liquidity
When the liquidity environment does not fundamentally improve, the rise in risk assets is often unsustainable.
But there are exceptions:
1. Fundamental improvements suddenly surpass expectations significantly (not relying on liquidity)
For example, revolutionary technological breakthroughs, explosive productivity increases, or systemic upward shifts in corporate earnings. Even if liquidity is neutral or slightly tight, risk assets can continue to rally (a typical example is the early internet boom in the late 1990s).
2. Recovery from extreme pessimism to normal expectations
When the market shifts from extreme panic (severely scarce liquidity) back to normal liquidity, even without a large increase in total volume, just the "elimination of panic premiums" can drive strong gains that last for months to over a year.
3. Structural liquidity redistribution
Money moves massively from one place (cash, government bonds, gold) to risk assets. Even if the total amount doesn’t change, this can create a strong structural bull market (for example, parts of the 2023 US stock AI rally).
4. When central banks have "strong expectation management"
Markets believe "liquidity can come at any time," so they rise in anticipation before liquidity actually arrives (such as some rebounds in March-April 2020, or during certain periods of very strong "Fed put").