Global Liquidity Updates

This Wednesday, Jerome Powell is set to speak.

While no changes to interest rates are expected, the market will be watching closely for any signs the Fed may deviate from its plan for two rate cuts this year.

Any such hints could shift market sentiment.

Meanwhile, the $DXY continues to weaken.

As noted in our previous update, the relief rally to the downside is unfolding, creating favorable conditions for other central banks to implement easing measures.

Interestingly, this aligns well with President Trump's push to revive US manufacturing, as a weaker dollar supports his broader goals.

Expect further declines as we progress through the year.

On the domestic front, bank reserves remain alarmingly low, just barely enough to keep the system functional.

Additionally, the TGA is expected to shrink in the coming weeks, as emergency measures are being used instead of an immediate reduction.

Collateral values, however, continue to improve.

As for today's market turmoil, it's important to note this drop is not rooted in fundamentals but rather tied to DeepSeek's entrance into the AI sector.

Once this sentiment-driven panic subsides (as it always does), we expect Bitcoin to rebound strongly.

Our Global Liquidity Index rose by $1.355 trillion this week, marking a +1.06% increase.

While liquidity momentum remains weak, the 3-month RoC is starting to pick up but still trails the 12-month RoC.

Early signs of a more positive environment are emerging.

‍

A noteworthy gap between our Global Liquidity Bands model's fair value and the current ETH price.

Aware that it's an unpopular opinion, but wouldn't it be ironic if Ethereum becomes the leading catalyst that drives the next Bitcoin leg up?

With so many .eth OGs capitulating on CT and changing their names, it really would be a story for the history books of the crypto universe.‍

‍

Our Liquidity Oscillator is showing a rapid increase in positive RoC.

After an extended period of negative conditions, the oscillator has shown first signs of noteworthy rate of change - coinciding with Bitcoin's recent surge.

If this trend holds, we expect a confirmed positive signal by Monday.

‍