Yesterday, I used plain language to explain global liquidity and its impact on the crypto market. Today, let’s take a closer look at the current global liquidity and whether we are optimistic or pessimistic about the future market of the cryptocurrency circle.
According to the latest public data on the total money supply M2 in the United States, the market liquidity funds in February 2025 were 21.6 trillion US dollars, reaching the highest point in March 2022.
The Federal Reserve is currently in a rate cut cycle. Although the interest rate meeting in March did not cut interest rates and remained unchanged, in the Q&A session after the meeting, Federal Reserve Chairman Powell said: The Federal Reserve has made a technical decision to slow down the pace of balance sheet reduction (in disguised form to provide liquidity to the market).
At the same time, under the leadership of Musk's Government Efficiency Department, a large amount of expenditures for the US government have been reduced. Politically, it is inclined to get rid of the burden of Europe, which is also part of the cost-saving
During Trump’s administration, at least we were very clear about the financial direction, and the consensus of Wall Street was: the crypto market
Therefore, from the perspective of liquidity in 2025, it is objective for the crypto market. So how can we predict the future and capture the trends of global economic liquidity in advance?
Financial liquidity and industry cycles are mutually reinforcing. The overall financial cycle will be larger and slower, just like a big ship is difficult to turn around, and the brakes need to be more gentle.
However, the cryptocurrency market is not that big yet, and it has always been very volatile, more sensitive, and more responsive. This is because capital has a faster grasp of cycles and resource information than retail investors. After capital understands policy trends, it will make arrangements in advance, which is reflected in the K-line and volume on the market.
For example, at the beginning of this round of bull market, why was Sancai able to judge that the bear market bottomed out at Bitcoin 15487 in November 2022 and slowly turned into a bull market?
At that time, the market believed that interest rates would continue to rise and Bitcoin would fall below 10,000. The market also believed that it was in a bear market throughout 2023. Until the Bitcoin halving in 2024, the United States maintained interest rates unchanged.
At this time, the price of Bitcoin has reached 60,000-70,000 US dollars. At this time, retail investors will worry that the price is too high and they will be afraid of a sharp drop.
On the contrary, the withdrawal of capital is also reflected in the market in advance, rather than waiting for interest rate hikes or cuts and liquidity to become clear.
Looking back, we can see that the circle in 2022 is the high point of M2, but how can we judge at that time that it cannot be more? Can't it be lower in advance?
The big cycle can provide us with long-term direction, but how to go in the medium term, when to stop falling, when to peak, we need to cooperate with the market and understand the market situation.
So, we can look at the economic policies of the big cycle, but we cannot lack technology. We need to keep track of the market and know when changes will occur.
If you want to make stable profits, you must go through a bottleneck period of several years, half a year to learn technology, a year to practice execution, and a year and a half to practice mentality. The most important thing is to make the least loss during the bottleneck period. If you are willing to spend time, energy, and be good at summarizing, and have a good teacher and helpful friend to accompany you, then your career in the cryptocurrency circle will be much simpler. The stars are shining as always.
You will definitely gain something. Helping others is like helping yourself. There is no bad market, only bad operations. I hope that no matter how the market changes, we can always go on together and laugh at the cryptocurrency world ten years later.
Hello everyone! I am Guiyan. The above are some of my insights from the past 10 years of cryptocurrency trading. They are all from the bottom of my heart. I have gone through many detours before I slowly realized the truth. Today I summarize and share with you, hoping that it will be of some help to your understanding and thinking about cryptocurrency trading.
