Bitcoin price rallies as global liquidity growth accelerates — Analysts
Key takeaways:Bitcoin’s price closely tracks global liquidity growth, with liquidity explaining up to 90% of its price movements, according to Raoul Pal.In the long term, global liquidity continues to expand, driven by the increasing debt levels in many countries.On a shorter timeframe, global liquidity follows a cyclical pattern, with Michael Howell projecting the current cycle to peak by mid-2026.Bitcoin (
BTC) price is notoriously sensitive to global liquidity. Some analysts go as far as calling their correlation near-perfect, with a lag of about three months. This relationship is fueling the current bullish narrative as BTC price soars back above $100,000, but how long can this trend last?Liquidity is Bitcoin's silent price driverRaoul Pal, the founder of Global Macro Investor, recently gave a speech on the strong correlation between Bitcoin and global M2 liquidity. In a recap https://x.com/paulguerratv/status/1919155613638049990
on Chair Jerome Powell is mounting, especially from US President Donald Trump.At the same time, economic uncertainty is driving up US Treasury yields and fueling bond market volatility, both indicators of collateral scarcity and tightening credit conditions. Over time, these pressures are likely to become headwinds for liquidity expansion. Meanwhile, a looming recession is expected to weaken investor risk appetite, further draining liquidity from the system.Even if a downturn lies ahead in 2026, global liquidity still has room to run, at least through 2025. And that matters for Bitcoin.Howell notes,“The likely inevitable policy response of ‘more liquidity’ is a great future omen. It establishes the upward path of persistent monetary inflation that ultimately underpins hedges such as gold, quality equities, prime residential real estate, and Bitcoin.”Interestingly, Howell’s liquidity cycle roughly aligns with Bitcoin’s four-year halving cycle. The former points to a potential peak in late 2025, and the latter in early 2026. If history rhymes again, that convergence could set the stage for a major price move.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
https://images.cointelegraph.com/images/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjUtMDUvMDE5NmI1ZjYtOTY2Ny03NGRiLWJkM2ItOWNhZmRmM2Y0ZjNl.jpg
https://cointelegraph.com/news/bitcoin-price-rallies-as-global-liquidity-growth-accelerates-analysts?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound
@ Cointelegraph.com News (RSS Feed)
2025-05-09 19:00:00Bitcoin price rallies as global liquidity growth accelerates — Analysts