Bitcoin may remain in consolidation as analysts debate whether liquidity growth alone can drive a sustained rally. While BTC’s price often moves in tandem with global liquidity, some experts question the strength of this correlation, suggesting it may not be as influential as traders assume.
On March 28, Matrixport analysts noted in an X post that increasing money supply from central banks could lead to some liquidity flowing into the crypto market. However, they cautioned that this does not necessarily drive Bitcoin prices higher, as the correlation lacks a solid theoretical foundation.
????#MatrixOnTarget Report – Mar 28, 2025
THIS Liquidity Indicator Nails Bitcoin Turns—Again?#Matrixport #BTC #Crypto #CryptoInvestors #Trump #Bitcoin #USDT #Trading #BTCETF #Global #Market pic.twitter.com/HHZ01Ibbvm
— Matrixport Official (@Matrixport_EN) March 28, 2025
“While a lag between money supply growth and Bitcoin’s price action may exist, there is no strong theoretical basis for why this should consistently be 13 weeks — the timeframe that currently offers the best visual correlation,” Matrixport explained.
The analysts further warned that comparing Bitcoin’s price to global liquidity could be misleading. Since both metrics are non-stationary and trend over time, they argued that correlation analysis might produce misleading conclusions, distorting investors’ expectations.
Without a clear catalyst, Bitcoin’s price could continue to move sideways, Matrixport suggested. They pointed out that aside from major events like last year’s U.S. presidential election, Bitcoin has primarily remained in a range-bound market. While some traders view liquidity trends as a key indicator, Matrixport emphasized that crypto-native developments and broader macroeconomic policies may play a more decisive role in shaping Bitcoin’s trajectory.
Adding to the cautious outlook, another analyst highlighted concerns over Bitcoin’s future, noting that the Bitcoin Macro Index shows a bearish divergence. “Bitcoin has one foot in trouble,” they warned, questioning whether BTC can sustain its uptrend and reach a new all-time high or if the market is poised for another prolonged downturn.
????????????Hello everyone!
It looks like #BTC has one foot in the shit, even the fundamental indicator @caprioleio Bitcoin Macro Index has a bearish divergence!
Can #Bitcoin hold the trend and update the ATH this time or are we falling into a bear market for another year? pic.twitter.com/u2lKoweHBz
— ANONYMOUS TRADER (@A_Trade_Academy) March 27, 2025
Meanwhile, a previous report from Matrixport suggested that institutional investors are becoming a dominant force behind Bitcoin’s price movements. In a February 26 X post, the firm noted that Bitcoin’s market dominance remains at 60%, but its price action now closely mirrors BlackRock’s IBIT ETF. This, they argued, underscores Wall Street’s growing influence in the crypto market, further shifting the dynamics of Bitcoin’s price behaviour.
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