After having reached the mythical peaks of $100,000, Bitcoin is slowly but surely coming back down, leaving a bitter taste for those who hoped for even more. Experts warn that the worst could happen for traders in the short term, the excitement would soon give way to a sharp correction. But what do the models say about this potential descent? And why could global liquidity be the crux of this war?
Bitcoin's Challenges to Global Liquidity
Bitcoin news: analysts agree that the queen of cryptos does not operate in a space vacuum. Jamie Coutts, crypto strategist at Real Vision, affirms it :
“ Global liquidity is tightening, and Bitcoin is dancing on borrowed time. »
Her MSI model (Macro & Liquidity Dashboard) has been raising the alarm since October, suggesting two to three complicated months for BTC.
Some alarming findings :
- The MSI turned red in mid-October, signaling a reversal of trends;
- Liquidity-fueled rallies have a limited duration, often followed by severe corrections;
- The recent strengthening of the US dollar could make the situation even worse.
Clearly, if economic conditions do not ease, bitcoin could experience poor returns and increased volatilitywhich is not good news for fans of “buy the dip”.
BTC price suspended on dollar strength
Another key piece in this equation: the American dollar. Since November 2022, the DXY (Dollar Index) index reached its highest levelschallenging risky asset markets. Jamie Coutts hopes this increase is just a “false start”, because too strong a dollar would be a drag on bitcoin.
However, if the DXY pivot remains intact, Coutts remains optimistic for the first quarter of 2025. Until then, caution is advised. As in 2022, euphoric rallies often mask a reality : they rest on fragile foundations and are sometimes too heavily financed by leverage.
For traders, a piece of friendly advice: leave your emotions at the door. A recent Kraken study on FOMO proved that giving in to the fear of missing out costs investors a fortune. Don't play with fire.
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