According to the latest public data on the total money supply M2 in the United States, the market liquidity in February 2025 is 21.6 trillion dollars, reaching the last peak in March 2022.
Currently, the Federal Reserve is in a rate-cutting cycle. Although there was no rate cut at the March meeting, and it remained unchanged, during the Q&A after the March meeting, Fed Chair Powell stated: The Fed made a technical decision to slow down the pace of balance sheet reduction (effectively providing liquidity to the market).
Meanwhile, under the leadership of Musk's Efficiency Department, a lot of spending has been reduced for the U.S. government, politically inclined to shed the burden of Europe, which is also part of the cost-cutting.
During Trump's presidency, at least we had a very clear financial direction, in consensus with Wall Street, all pointing towards: the crypto market.
So looking at liquidity in 2025, it is objective for the crypto market. How can we foresee and capture the trends of global economic liquidity in advance?
Financial liquidity and industry cycles are mutually reinforcing relationships; the overall financial cycle tends to be larger and slower, similar to how it's difficult for a large ship to turn around, and braking also needs to be more gradual.
However, the cryptocurrency market is not that large at the moment, historically very volatile, more sensitive, and reacts more quickly, because capital has a better grasp of cycles, and resource information is faster than retail investors. Once capital understands policy trends, it will layout in advance, reflected in the market's candlestick charts and trading volume.
For example, regarding the start of this bull market, why was SanCai able to determine in November 2022 that Bitcoin at 15,487 marked the bottom of the bear market before slowly transitioning to a bull market?
At that time, the market believed interest rates would continue to rise, and Bitcoin would fall below 10,000. The market similarly believed it was in a bear market throughout 2023, until the Bitcoin halving in 2024, when the U.S. maintained interest rates.
At this time, the price of Bitcoin has reached 60,000 to 70,000 dollars, and retail investors will again worry that the price is too high and may drop significantly.
Conversely, capital withdrawal is also reflected in the market in advance, rather than waiting for interest rate increases or decreases when liquidity is already clear.
Looking back, we can see that the circle in 2022 is the peak of M2, but at that time, how to judge it, can't we do more? Couldn't we have predicted it would go lower beforehand?
The macro cycle can provide us with a long-term direction, but how to navigate the medium-term direction, when to stop falling, and when to reach a peak, needs to be coordinated with the market and be able to understand the trends.
So, we can look at the macroeconomic policies, but we can't lack technology, constantly tracking the market, and knowing when changes occur.
If you want to seize this bull market, learning on the fly will definitely be too late; it's best if someone can guide you for a quick start.
We are primarily a blogger focused on freshness.
Teaching someone to fish is better than giving them fish.