Rising Liquidity and Dollar Weakness Signal a Shift in Market Dynamics

Global liquidity has started inching higher.

Chart below is showing Bitcoin's correlation during the choppy market conditions from last year.

There is a noteworthy rise in liquidity since Monday, collateral values are improving and the RRP is approaching zero.

At the same time, the DXY is losing momentum, just after inflation data came lower than expected.

We don't think Trump would favor a strong dollar, as it raises costs across the board.

A stronger dollar makes manufacturing in the US more expensive, and it hurts exports.

Meanwhile, China is still holding back on major liquidity injections to keep the exchange rate with the dollar stable.

With that said, there is still a large amount of re-financing needed this year, which the FED will have to address.

For now, path towards higher liquidity looks promising.

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