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Bitcoin – How global liquidity will affect BTC’s bull market trend
Global liquidity highlights Bitcoin’s sensitivity to economic shifts, driving potential bullish momentum amidst quantitative tightening and renewed optimism.
Recently, the correlation between Bitcoin’s (BTC) price movement and global liquidity has become increasingly apparent. A closer analysis of these factors suggests that the current upward trajectory may persist as long as capital continues to shift towards riskier assets.
It is crucial to understand how decreasing demand for U.S. Treasury Securities signals a potential shift in capital allocation, driving bullish momentum for Bitcoin. The 2021 bull market saw an influx of new participants and increased social engagement following significant liquidity-driven price movements.
The delayed response in social activity mirrors the slight lag in Bitcoin’s reaction to M2 liquidity inflows. However, if this activity continues to rise, it may signify increased market participation, bolstering a potential bull trend.
Higher activity levels are linked to periods of enhanced price momentum as more participants contribute to strengthened network demand. Recent data showcases a steady increase in active addresses, aligning with the recent uptick in global M2 liquidity and BTC’s recovery.
A continuous rise in active addresses would demonstrate growing confidence within the network, underscoring the possibility of an extended bull market. On the other hand, stagnation or decline could signify hesitation or profit-taking among participants.
Bitcoin’s current upward trajectory is fueled by its sensitivity to global liquidity trends as shown by the correlation with 30DMA. The slight uptick in global liquidity, combined with declining UST demand and ongoing quantitative tightening from the Federal Reserve, has provided a basis for Bitcoin’s growth.
The shift from fear towards cautious optimism indicates improving market sentiment, while rising social engagement reflects growing interest. Rising active addresses signal strengthening network activity.
As we move forward, it is essential to keep an eye on the interplay between global liquidity, market sentiment, and network activity. Should systemic risks prompt Federal Reserve intervention, BTC may witness a more rapid bull run driven by renewed capital inflows.
By: Jacob Thomas
Source: ambcrypto.com
