Bitcoin market, cycles & ETF flows
Timeline of BTC price action, halving-cycle milestones, ETF flows and correlations with macro liquidity.
i covered more this aspect of QE in my thread about how to use yield spreads to reason about future Bitcoin price and cycles
you can read it here: https://illya.sh/threads/@1755595543-1.html
once Fed does QE, reserve account balances increase, thus directly increasing base money
broad money either increases indirectly or directly if the Fed credits a non-bank institution
cryptocurrency prices perform well when yield spreads are low/decreasing and bad when yield spreads are high/increasing
this is specifically true when you analyze it at a higher timeframe - think monthly timescale instead of daily one. and the larger the spike/change
eventually this carry trade unwinds, and yield spreads soar. balance sheet constrains, existing positions get too expensive too roll-over/re-finance that’s where you get the big(er) financial crisis
and then you get more QE/lower rates to address that
here's what yield spreads are saying about Bitcoin
≈3-3.40 is an important historical band which served as support bottom several times, including during COVID, and partly during the 2008 GFC
so far it looks like a trend-reversal in the short-term, with the spreads heading up
so when market signals a higher risk appetite - Bitcoin tends to see inflows
when market is more risk-averse - bitcoin tends to see outflows, alongside other risk assets
you can use the US Treasury/riskier bonds yield spreads to understand BTC's trend direction. it's an alpha
if you overlay Bitcoin's price history over those yield spreads, you will notice a significant level of correlation
⬆️ Bitcoin appreciates when spreads are lowering and/or low
⬇️ Bitcoin depreciates when spreads are increasing and/or high
makes sense - Bitcoin is a risk asset
if you overlay Bitcoin's price history over those yield spreads, you will notice a significant level of correlation
⬆️ Bitcoin appreciates when spreads are lowering and/or low
⬇️ Bitcoin depreciates when spreads are increasing and/or high
makes sense - Bitcoin is a risk asset
thus, you interpret yield spreads between US Treasuries and riskier bonds as:
📈 increasing/high yield spread = risk-off
📉 lowering/low yield spread = risk-on
yield spreads between US Treasuries and riskier bonds mirror the price of Bitcoin
in practice, there is a correlation between them:
📈 yield spreads up = ⬇️ BTC down
📉 yield spreads down = ⬆️ BTC up
why? because those spreads are proxy for market's risk appetite
this is because a stablecoin mint/creation on-chain is the proxy for a T-bill purchase by the company issuing that stablecoin (e.g. Circle, Tether)
so stablecoin inflows proxy T-bill purchases, which raises their price and lowers the yield
stablecoin inflows lower 3M Treasury bill yields, while outflows raise yields by a larger amount
LP-IV estimates:
⏩ $3.5B inflows lower yields by ≈3 bp
⏪ $3.5B outflows raise the yields by ≈8 bp
inflow = mint
outflow = redemption/burn
and there it is - a new BTC all time high in Euro 🇪🇺🥳
and soon the Eurozone will join the new BTC all time high party 🇪🇺🥳
Bitcoin still hasn't seen a new high in EUR since January 2025
this happened to due the relative appreciation apprtetiation of Euro against US dollar
and soon the Eurozone will join the new BTC all time high party 🇪🇺🥳
Bitcoin still hasn't seen a new high in EUR since January 2025
this happened to due the relative appreciation apprtetiation of Euro against US dollar
and there you go, Bitcoin reached a new all time high 😄
notice how precisely it respect the trend lines
and there you go, Bitcoin reached a new all time high 😄
notice how precisely it respect the trend lines
bitcoin went up 6% from the weekly support line
until the end of this month, bitcoin will either see a new all time high or retest the ≈$0.1095M support
this is the daily timescale of the same chart - the blue and red lines are weekly, green is daily
just a quick check-up
and the crypto market cap has now been sitting at $4 trillion for the 3rd day 🤝
🚀 and indeed the crypto cap increased even more
now, await for a solid $4 Trillion
it's almost like it's correlated with global liquidity flows - or perhaps I'm just really good at guessing 😳
i wrote a lot about this in the past - so read up for details if inerested!
bitcoin went up 6% from the weekly support line
until the end of this month, bitcoin will either see a new all time high or retest the ≈$0.1095M support
this is the daily timescale of the same chart - the blue and red lines are weekly, green is daily
just a quick check-up
Bitcoin is still in a weekly uptrend it must either go up or down to ≈$109500 - a strong weekly support
two factors in play here:
1️⃣ USD index - inverse correlation
2️⃣ Global liquidity- correlation
keep watching central bank's open market operations & balance sheets
Bitcoin is still in a weekly uptrend it must either go up or down to ≈$109500 - a strong weekly support
two factors in play here:
1️⃣ USD index - inverse correlation
2️⃣ Global liquidity- correlation
keep watching central bank's open market operations & balance sheets
🇪🇺 in the EU, Bitcoin still hasn't reached a new all time high
but a little bit more depreciation of EUR against USD can finally bring the FIAT party to the Europeans as well 😂
although in these cases being late to the party is better
when your favorite altcoin goes up in price soon remember one thing:
👉 it likely has to do more with liquidity flows than an increase in the inherent value of your preferred project
rule of thumb: if everything is systemically up - it's liquidity flows 😄
yes - US, China, EU & others will print a lot more as well 😄
that BTC was seized as a part of criminal proceedings. German Code of Criminal Procedure (111p), allows such sales if there's a risk of significant value loss
crypto is extremely volatile & 0.1% insignificant 🤷♀️
🚀 crypto inflows materialized as expected
but wait - it's not over yet
more upside to come 👀📈
⚡️ Crypto market cap down 2.6% today
Explains the overall pullback across prices. Some went into gold & bonds (yields are down today)
Could head a little lower - but definitely temporary. Expect inflows/increase soon
Bitcoin all time high in the EU is delayed ⏱️
but that's actually a good sign for 🇪🇺😄
🇩🇪😱 Germany lost $2.75 billion on Bitcoin
ok, let's look at the numbers:
1️⃣ German's yearly public budget spending is ≈$2 trillion
2️⃣ $2.75 billion is 0.138% of $2 trillion
3️⃣ okay then 🤷♀️
*this is also assuming they didn't invest that money into something productive
🇨🇳 China's reverse repo liquidity injections predict Bitcoin bullruns
it works like this:
📈 high PBoC injections = increasing bitcoin price
📉 low PBoC injections = sideways or decreasing
so every time China injects Yuan/reminbi, BTC price goes up 😁
🇨🇳 china injects liquidity mainly via reverse repurchase agreements
🏦 chinese central bank buys government bonds from commercial banks, selling them back later. this new cash is re-invested yielding a spread
💹 essentially, they allow banks to earn a yield on their bonds
btw I'm not saying Ethereum won't reach 1 million USD per ETH, but rather pointing out that comparing Ethereum to the bond market and oil is a stretch
it's also more accurate to account for the whole crypto cap in this context
$29,000 per lb of orange juice.
You're early.
🍊😄
the 14 year old dormant bitcoin wallet transactions are likely OTC operations
if you want to buy/sell >$1B worth of bitcoin, you're not going to do it through coinbase 😄
i've encountered numerous alternative explanations - some very creative
🪒 remember: occam's razor
check the correlation between FED swap line volumes and Bitcoin price
large spikes in swap volume trigger an uptrend in Bitcoin
understanding these global liquidity flows helps to visualize them as a part of the larger system and understand where it's likely to move next
new currency in circulation is just one of the side-effects
and that transition is neither direct, nor instant
before these funds effectively become new currency, they flow into financial markets - that's why you see the stock market going up first
the same for risky assets
now it's official 😄
ethereum price fell to $2180 📉
interestingly, the majority sentiment of large following X accounts seemed to be bullish
please note, I wrote the original post more than a week ago - back then the market sentiment was extremely bullish
While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support
Do not underestimate what the new all time highs in gold are telling you
ethereum's price will very likely retrace upwards once it reaches the core monthly support area
the buying pressure there would be immense
the same is true for bitcoin's support
and a week later Ethereum indeed falls sharply towards the monthly support 😄
read up my other posts for more detail - if you're interested in the rationale behind this move
