Bitcoin (BTC) might be on the verge of a huge price jump, according to Jamie Coutts, an analyst at Real Vision. He’s pointing to a key factor that has historically led to big Bitcoin rallies: global liquidity.
Liquidity is Key
Coutts says that global liquidity is starting to pick up steam, which is great news for Bitcoin. He explains that this usually happens before a Bitcoin surge. In the past, Bitcoin has often bottomed out a few months before global money supply hit its low point. Then, Bitcoin would skyrocket, even outpacing the increase in liquidity, before experiencing a mid-cycle correction.
Why is Liquidity Important?
Coutts believes that an increase in global money supply is inevitable. He explains that our financial system relies on debt, and to keep things from collapsing, the money supply needs to constantly grow to support all that debt.
The Dollar’s Role
The strength or weakness of the US dollar also plays a big role in Bitcoin’s price, according to Coutts. When the US Dollar Index (DXY) weakens, it often means the Federal Reserve is injecting more liquidity into the global economy, which is a positive sign for Bitcoin.
The DXY is currently down about 4% from its 2024 high in April. If it continues to weaken, it could be a good sign for Bitcoin.
Disclaimer: This is just one analyst’s opinion. Do your own research before making any investment decisions.
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