Bitcoin: A Macro Liquidity Signal Worth Watching 📊
Bitcoin’s major market cycles have historically aligned with shifts in global liquidity conditions rather than isolated technical signals. One macro indicator that has consistently preceded Bitcoin’s strongest advances is the LMACD derived from the CN10Y yield and U.S. M2 money supply (M2SL) 🌍💧
In prior cycles, a reversal in this LMACD from negative to positive territory marked the transition from liquidity contraction ➝ liquidity expansion. These turning points coincided with the early stages of Bitcoin bull markets 📈, suggesting that improving macro liquidity creates favorable conditions for sustained upside.
At present, this same indicator is showing signs of a renewed bounce 🔄. While this does not guarantee immediate price appreciation, it reflects a structural improvement in the macro environment that has historically supported higher Bitcoin valuations over medium- to long-term horizons ⏳.
Importantly, macro liquidity signals tend to lead price action 🧭, offering context beyond short-term volatility. If liquidity expansion continues, Bitcoin may once again benefit as capital reallocates toward scarce, risk-on assets 🪙.
Key Takeaway 📝
Bitcoin’s broader trend remains constructive as long as macro liquidity continues to recover, reinforcing the importance of monitoring macro indicators alongside traditional market analysis.
