Bitcoin’s Next Move? Liquidity Surge and Fed Policy Point to Massive Upside

Our liquidity index surged by a significant $2.26T last week, marking an impressive increase of 1.76% which puts liquidity higher than it was at '23 ATH.

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Bitcoin's rally? Not a big surprise to us, it's been perfectly in step with our liquidity measure, just as we anticipated.

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The major boost came from China's aggressive lending and credit growth, followed by a notable upswing in Fed liquidity.

The ECB's recent 25bp cut is yet another indication that central banks are preparing for what lies ahead.

We believe that if the Fed cuts rates by 50bp this week, the likelihood of the ECB cutting again in October is high.

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The rate-cutting cycle has arrived, and as the Fed looks to ease further, it encourages other central banks, especially China which is in a deflationary state, to keep pace.

Additionally, increasing holdings of government securities by commercial banks are adding more fuel to the trend.

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September is shaping up to be a bullish month for Bitcoin, and our seasonality chart points to even bigger moves in the upcoming months.

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Our GL Index has been consolidating for a while, but every time liquidity rises, Bitcoin follows.

The correlation is undeniable.

We’ve seen this trend play out before, and it’s happening again.

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RoC still negative, but it's on the right move to cross 12m in the upcoming weeks.