Matrixport： Liquidity indicators may be difficult to accurately predict BTC trends, and attention should be paid to cryptocurrency native driving factors or policy impacts

According to Matrixport's analysis, there are certain limitations to the correlation between the increase in global liquidity and the rise in Bitcoin prices. The global liquidity indicator, measured by the total money supply of 28 central banks (standardized in US dollars), although visually correlated with Bitcoin price trends, has been questioned for its accuracy due to the non stationarity of time series and differences in scale. The analysis points out that although the growth of the money supply may have a lagging impact on the Bitcoin market, there is no strong theoretical support for this lag time. In addition, although the correlation between Bitcoin and Nasdaq has slightly increased in recent years, it is still lower than the high point of 60% during the COVID period, indicating that Bitcoin trading is more driven by its own patterns rather than solely serving as a proxy asset for technology stocks. Matrixport believes that the widespread consolidation of Bitcoin prices may continue, and relying solely on liquidity indicators to predict market trends may not be reliable enough. In contrast, focusing on the native driving factors of cryptocurrencies or macro variables with direct policy impact, such as political leaders who support cryptocurrencies, may be more valuable. Although market cognition may have mathematical flaws, its widespread acceptance may still have a practical impact on market behavior.