Market liquidity is still dry, when will the “upward tide” come?
author:@DistilledCrypto
Compiled by: Xiaobai Navigation Tech Flow
When will liquidity flow into the market?
More money coming in usually means highercryptocurrencyprice.
However, the current market remains dry, with no sign of the 2021 “uptick”.
I studied the macro expert CG ( @pakpakchicken) to find some clues.
Affected by policies
@pakpakchicken Spend hours every day tracking policy changes, "policy drives liquidity, liquidity drives assets, assets drive GDP... and so on"
hisin conclusionYes: The biggest risk is on the upside.
@CryptoXiaobai NavigationHayes and @RaoulGM Agree with this as well.
An overlooked insight
@pakpakchicken Pointing out that there is little discussion about the expectation that the dollar could weaken.
He predicted a coordinated move to devalue the dollar in the future, a move that could increase liquidity.
As background for the story, let’s review the events of 1985
The policy context around 1985 will help understand the mindset of policymakers:
→ Tight monetary policy
→ High long-term interest rates
→ Strong US Dollar (Exploring the “Milkshake Theory”)
→ High Deficit
Unprecedented volatility
As volatility season approaches,@pakpakchicken Extreme unrest is forecast.
This will be driven by the need for the US to repay its $35 trillion debt.
Why volatility is a good thing
@pakpakchicken Consider volatility not a flaw but a desirable feature of profitability.
A lot of money is made in short-term bursts.
Sideways trading will throw ordinary investors out, and the market will rise just when you give up.
Debt tocryptocurrencyImpact
To manage its massive debt, the U.S. may increase liquidity to devalue its currency.
This will ensure that debt rollovers are manageable, without which yields could spiral out of control.
Larry Fink's opinion
BlackRock CEO Larry Fink When it comes to the national debtMentioned:
No matter how the United States increases taxes or cuts debt, these measures are not enough to solve the national debt problem. Therefore, he emphasized that building new infrastructure is crucial. He believes that by building new infrastructure, it can not only promote economic growth, but also lay the foundation for future development.
CG（@pakpakchicken) believes that if the dollar still maintains its value, institutions will transfer all their assets toTokenchange.
CGMacro Update (Late Q2)
At the end of the second quarter, US weekly liquidity support was up to $2 billion per operation, and QT was reduced from $6 billion per month to $2.5 billion.
US policies increase the issuance of short-term bills, while the Chinese yuan may depreciate.
China's multi-trillion yuan liquidity growthMay be beneficialcryptocurrency, with deflation in the value of goods, services and assets and currency devaluation looming, these factors all point to a potentially bullish second half of the year.
U.S. Treasury BondsBuyback
Starting from May 29U.S. Treasury bond repurchase, weekly liquidity-backed buybacks surged to $2 billion, an injection of liquidity that could amplify cryptocurrency prices during a chaotic election season.
CG（@pakpakchicken) believes that an upward momentum may emerge in the second half of 2024.
Exponential Summer
@pakpakchicken Committed to cryptocurrencies as a leading asset class However, he stressed: “Markets can remain irrational longer than you can remain solvent.” A future of surging global liquidity is on the way…
Narrative fatigue
CG（@pakpakchicken) emphasizes that narrative comprehension is key.
Narratives drive markets until the value of the narrative is exhausted.
The CPI/inflation narrative is waning; recent reports lack impact.
The next mainstream focus
With bank reserves faltering, employment is in focus and rate cuts are coming sooner than expected.
TLDR: "Hold for the long term"
The most painful market trend
As macro forces converge, according to market rules, CG is expected to appear"The most painful market trend"
PS:"The most painful market trend"It is a concept in the financial market, literally translated as "maximum pain", which refers to the price change path taken by the market in a certain period of time, which usually causes the greatest pain and distress to most investors.
The logic behind this concept is that the market tends to choose price trends that magnify losses for most investors. The driving forces behind this market behavior include market manipulation, institutional investors' strategies, and the market's inherent supply and demand relationships.
Trends"The most painful market trend"What symptoms did you experience before?
-
Retail not ready for upturn
-
Many influential people say the market has peaked
-
Market Makers Go Short
-
Overwhelming bearish positioning
The end result is likely to be a sharp rise.
Betting $ETH
CG（@pakpakchicken)think $ETH meetingStand out in the uptrend.
As Larry Fink points out, debt is unsustainable in the long run.
Although the dollar has value, everything will be transformed andTokenchange.
Only one L1 has stood the test of time and has the highest adoption rate to date — $ETH
Respect for probability
Although CG (@pakpakchicken) tends to rise, but further declines are not impossible. Macro experts @fejau_inc WillSlowing economic growthLooking at the fundamentals, he believes there is currently a significant downside surprise risk not seen since 2019.
The article comes from the Internet:Market liquidity is still dry, when will the “upward tide” come?
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