Market watchers are paying close attention to liquidity conditions as the main guide for the next move in Bitcoin. On Feb 24, market voice BATMAN tweeted that the clearest bottom signal is not technical indicators but quantitative easing from the Federal Reserve.
In simple terms, quantitative easing is when the central bank makes money and purchases assets in order to inject more money into the financial system.
When there is more money in the system, risk assets receive more money from investors. Bitcoin is highly sensitive to this because it is considered a high-growth digital store of value.
Bitcoin is highly sensitive to this because it is considered a high-growth digital store of value. A case in point would be the 2020 market crash. At that time, the Fed’s balance sheet expanded rapidly as it purchased more assets.
As a result of the increased liquidity in the system, Bitcoin recovered quickly from its sharp fall. The traders’ message now is straightforward: monitor inflation, listen to Fed speak, and monitor balance sheet expansion to indicate QE.
Also Read: Strategy Maintains Bitcoin Position as Market Correction Tests Investor Confidence
Bitcoin Stuck Inside $64K–$67K Range After Liquidation Pressure
As per the research notes of Wintermute, Bitcoin has been struggling to move past the $70,000 mark after the recent liquidation incident.
The major trading range is now between $64,000 and $67,000. The market is more concerned about the absence of a strong bounce rather than the stagnation.
The trading volume has decreased, and the derivatives market is less confident about the trend. The demand for put options has increased, but the open interest has been declining since the end of last year.
Ethereum faced pressure and slipped below the critical level of $1,900. If the downtrend persists, the next technical region to focus on will be around $1,600, which might turn out to be a more favorable region for buyers to accumulate.
Macro Regime Shift Changes Risk Appetite
Many people believe that the desks of global markets are entering a new era of big-picture thinking. Two concepts that are influencing how people feel about the future are AI disruption and deglobalization.
The rapid development of AI, such as new models developed by companies such as Anthropic, is causing investors to question the value of technology stocks.
Growth industries are no longer as attractive because companies are spending more on capital, and it is difficult to see profits.
Source: X
On the other hand, high tariffs and disrupted supply chains ensure that input prices remain high. Structural trade barriers transform geopolitical risk into a long-term investment factor.
Money movement indicates cautious behavior. Some very rich investors temporarily acquired some altcoins, but the interest was not sustained.