Bitcoin is now reacting more to real market liquidity than to Federal Reserve interest rate decisions. In the past, rate cuts often pushed Bitcoin higher because lower rates increased risk appetite. But now, investors focus more on how much money is actually flowing through the financial system.
Liquidity means how easily money moves in markets. When the Fed reduces its balance sheet, bank reserves fall, or the U.S. Treasury issues more bonds, liquidity tightens. This can pressure Bitcoin prices. When liquidity increases, Bitcoin tends to perform better.
Since mid-2024, Bitcoin has shown stronger links to liquidity data like the Fed’s balance sheet and money supply, instead of just rate announcements. This shift shows the crypto market is maturing. Investors now need to track liquidity indicators, not only interest rate news, to understand Bitcoin’s direction.$XUSD
XUSD
--
--
USDC
1.0007
+0.01%