Bitcoin Sniffing Out a Dip in Market Liquidity

May 12, 2023 • 9 Min Read

Bitcoin Reflecting a Local Top in Market Liquidity

During the majority of Q1 and early Q2, the financial market observed a strong correlation between Bitcoin (BTC), equities, and gold, with an even more pronounced link between BTC and gold. This close relationship was a result of global market liquidity reaching its lowest point in Q4 of 2022, which coincided with a slowdown in inflation and (likely) the final stages of the Federal Reserve's tightening cycle. This relationship continues to be evident in the 90-day rolling correlations between these assets.

Source: Tradingview, Fundstrat...

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