Bitcoin isn’t moving the way it should. While global liquidity keeps expanding, BTC’s numbers look a bit different. Traders seem to be cautious, and the blind faith needed is still missing.
So where do we go from here?
Liquidity is booming, BTC is not following
Global money supply is at record highs. The US, China, Japan, and the Eurozone have all expanded M2 to new peaks, so there’s abundant liquidity across major economies.
So far, this setup has favored risk assets like Bitcoin. Yet, BTC remains nearly 30% below its all-time high.
Source: X
Liquidity is rising, but it hasn’t yet reached the speculative markets yet. Instead, capital is waiting it out as uncertainty and tight financial conditions persist.
When liquidity eventually rotates into risk assets, Bitcoin [BTC] is sure to make a move up.
Is it too early?
The Energy Value Oscillator shows BTC at levels last seen a decade ago, when the market was building its next major cycle. This metric tracks the energy poured into the network through mining and hash power.
Deep lows have usually meant long-term bottoms. Not tops.
Source: X
This cycle has never entered the overheated “red zone,” seen during past bull market peaks.
That fits with what we’re seeing elsewhere; tighter liquidity, a slow moving business cycle, and risk assets that haven’t fully picked up. The pressure is building towards something, and the big picture remains to be seen.
Derivatives confirm the hesitation
Bitcoin’s aggregated Open Interest has been trending lower, near $27.3 billion, after a decline. Traders are reducing exposure, not piling into leveraged bets.
At the same time, Funding Rates remained mildly positive at the time of writing, which means balanced positioning.
Source: Coinalyze
To put it simply, leverage is being drained from the system. Speculators are stepping back, waiting before putting in fresh capital. A reset like this usually happens before big moves.
If liquidity does rotate into risk assets, Bitcoin still has plenty of room to absorb it without overheating.
Final Thoughts
- Liquidity is rising, but risk appetite hasn’t switched on yet.
- With leverage flushed and energy metrics near cycle lows, BTC may be coiling.
