Understanding Global Liquidity š
Global liquidity is the total money supplied by central banks around the world
When central banks add funds, it encourages more investment, boosting both traditional and crypto markets. When they pull back, investors have less money to spend.
šÆ Stock and crypto markets rely heavily on this liquidity. More cash usually lifts prices, while reduced liquidity can push them down as there's less money chasing the same amount of assets.
š Recently, global liquidity has decreased by $4.2 trillion, creating uncertainty for both markets. Less money available means slower price growth and makes it harder for asset prices to keep rising.
You can see a strong correlation in the chart above. When the money supply is rising, it's bullish. Fortunately, in the long run, it will rise insanely high because fiat money is worthless and can be created out of nothing š¤·āāļø$BNB
