July 24, 2024
Bitcoin Price May Rebound in 10 Days as Fed Liquidity Increases
Bitcoin price today

Bitcoin Price May Rebound in 10 Days as Fed Liquidity Increases

Thursday, June 20, 2024: Bitcoin Price Today is $66,334. According to financial commentator Tedtalksmacro, Bitcoin has about 10 days before U.S. macroeconomic conditions support a price rebound, given the correlation between BTC price action and U.S. Federal Reserve liquidity.

Source: TradingView

Correlation Between Bitcoin and Fed Liquidity

Despite Bitcoin’s BTC tickers being down approximately 3.2% in June, a reversal might be on the horizon before the month concludes. Tedtalksmacro has been analyzing the impact of Fed liquidity conditions on BTC/USD, revealing a consistent close correlation that has persisted for several months. “The correlation between Bitcoin + Fed Liquidity never ceases to amaze me,” he wrote in accompanying commentary on X.

“Liquidity bottoms in the coming 10 days, then rips higher again… get ready.”

BTC/USD vs. Fed liquidity. Source: Tedtalksmacro

A chart from his proprietary macro data resource, Talking Macro, demonstrated that BTC price highs and lows have been syncing with local peaks and troughs in Fed liquidity. Even Bitcoin’s latest all-time high of $73,800 in mid-March coincided with a liquidity spike. Tedtalksmacro clarified that liquidity is calculated based on “a mixture of Fed assets, repo markets, treasury data.”

Short-term Headwinds and ETF Outflows

Talking Macro also highlighted short-term headwinds for Bitcoin, particularly noting a recent decline in inflows to U.S. spot Bitcoin exchange-traded funds (ETFs). After experiencing their second-highest daily inflows on record in early June, the trend reversed, with the past four Wall Street trading days conversely seeing net outflows.

Source: Talking Macro

Monitoring resources, including the United Kingdom-based investment firm Farside Investors, reported that the four-day outflow tally reached just over $700 million, which is still less than the June 4 $886 million inflow. This shift in ETF inflows and outflows is seen as a problematic factor in the short-term outlook for Bitcoin.

Anticipation for Institutional Interest in Bitcoin

Looking ahead to the third quarter and beyond, anticipation is building for a new wave of institutional interest in Bitcoin. U.S. wirehouses are predicted to gain access to spot ETF products, which is expected to significantly influence Bitcoin’s market dynamics. As per reports, this anticipated development is a key point for those observing Bitcoin’s ongoing transformation into an institutional heavyweight investment class.

Bitcoin ETF flows (screenshot). Source: Farside Investors

Among the notable figures is Cathie Wood, CEO of asset manager ARK Invest, one of the spot ETF providers. In an interview in March, she remarked on the significant potential once platforms approve Bitcoin, stating, “No platform has approved Bitcoin yet, so all of this price action has happened before they approve it, and so we haven’t even begun.”

This potential influx of institutional interest, combined with the anticipated macroeconomic conditions, suggests a promising future for Bitcoin, contingent on the evolving landscape of Fed liquidity and ETF inflows.

Image by bitcoin-schweiz from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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