Global liquidity, a cornerstone of financial market dynamics, is beginning to lose momentum. According to cycle scientist Lars Von Thienen, liquidity conditions from regions like the U.S., China, and Europe are still growing but at a noticeably slower pace. This shift signals an impending change in the market landscape, particularly for cryptocurrencies like Bitcoin and altcoins.
How Liquidity Impacts Bitcoin
Von Thienen highlights that approximately 40% of Bitcoin’s price is influenced by global liquidity conditions. He emphasizes that the uptrend Bitcoin experienced starting in 2023 may now be approaching its peak. While this doesn’t spell an immediate crash for Bitcoin, the days of aggressive price expansion could be behind us. If liquidity continues to cool, the growth rate of most risk assets, including crypto, will likely slow.
The Altcoins Landscape: No Major Rally in Sight
Historically, altcoins have rallied after Bitcoin peaks. However, this time, Von Thienen suggests the scenario is different. With global capital becoming more cautious and new liquidity moving into real-world markets, altcoins may struggle to sustain momentum. He predicts no major ‘altcoin season’ will take place this cycle, leaving altcoin traders disappointed.
What Lies Ahead: Downcycle by 2026
Looking ahead, Von Thienen forecasts a downcycle in global liquidity starting around the second quarter of 2026. During this period, both Bitcoin and altcoins could face weaker market conditions as liquidity tightens further. For crypto investors, this means a longer phase of consolidation or falling prices before a potential new cycle begins. Instead of speculative assets, capital might flow more toward productive sectors.
Expert Advice for Navigating the Crypto Market
For those navigating the cryptocurrency space, understanding global liquidity trends is crucial for informed decision-making. As markets shift, diversifying investments and exploring other asset classes or industries may be wise. Additionally, staying updated with accurate data is essential for making timely moves in the volatile world of crypto.
Consider integrating tools like the Ledger Nano X, a secure hardware wallet to store your crypto holdings safely during periods of market uncertainty. With advanced security measures and ease of use, it’s a must-have for crypto enthusiasts and long-term investors. Learn more here: Ledger Nano X Official Site.
Closing Thoughts
While the pathway ahead for Bitcoin and altcoins looks less promising in the short term, understanding macroeconomic trends like global liquidity can provide clarity on market trajectories. As liquidity shifts, staying informed and prepared will help investors better manage risks and rewards in the ever-changing crypto landscape.
