I recently came across a pretty interesting perspective: the global liquidity indicator is highly correlated with Bitcoin's price movement, with a correlation reaching 90%. This data has been consistent since 2012. Think about it—what does this imply? It suggests that macroeconomic factors are the real drivers, not just the purely technical analysis some claim.

Many people in the market are calling for a bear market, saying crypto is finished. But if you look at it from the liquidity perspective, the situation is completely different. The global liquidity annual growth rate is about 10%, and there are no signs of slowing down. More importantly, U.S. overall liquidity was suppressed during the stagnation period, but now it’s accelerating back up, leading the crypto market by about three months.

Banks are also pushing liquidity higher. Tax refunds are flowing into bank balance sheets, boosting credit creation. The eSLR mechanism is also increasing, with banks expanding liquidity through credit and government bond issuance. This trend will further accelerate. Plus, the U.S. is expected to cut interest rates further, all pointing toward easing liquidity conditions.

The development of stablecoins is also rapid; last year’s issuance grew by 50%, with trading volume reaching trillions of dollars. The CLARITY bill is expected to pass, which will address the demand from many banks and asset management firms wanting to utilize this technology. The U.S. government’s support for cryptocurrencies has also reached an all-time high.

From a technical standpoint, the DeMark indicators are now stacking up, with weekly indicators set to provide solid support in about two weeks. The market is currently in the most oversold phase in history, which you all understand what that means. As long as no new weakness appears in the next two weeks, a full technical reversal will be completed.

The risk lies in how long oil prices can stay high, but overall, these factors combined indicate that the relationship between liquidity and market fundamentals is pointing in the same direction. Further upside is expected.