Bitcoin may continue trading in a sideways consolidation phase as market analysts cast doubt on the idea that global liquidity growth alone can drive the next major rally. In a recent report shared on March 28, analysts at Matrixport highlighted the fragility of relying solely on liquidity metrics as a signal for Bitcoin price action.
“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,” Matrixport noted, referencing a common correlation timeframe used by some traders.
Despite past observations suggesting a relationship between central bank liquidity expansions and crypto price surges, Matrixport cautioned that this correlation may be overstated or even misleading, due to both being non-stationary time series—datasets that trend over time and can distort analytical results.
Liquidity Alone May Not Be Enough
Although liquidity growth often coincides with upward momentum in Bitcoin and other digital assets, the report emphasizes that other factors—such as regulatory developments, geopolitical shifts, or major technological upgrades—are more likely to drive meaningful breakouts.
Matrixport also pointed out that Bitcoin has largely traded sideways since the excitement surrounding last year’s U.S. presidential election, with no clear catalysts emerging to fuel sustained gains.
“Liquidity might help, but it’s not enough to trigger a breakout on its own,” the analysts stated.
Market Conditions Still in Flux
The broader crypto market has remained volatile amid lingering macroeconomic uncertainties, including concerns over tariff escalations, inflation pressure, and potential changes in Federal Reserve policy.
Meanwhile, Bitcoin is currently trading around $85,000, down nearly 1.7% in the past 24 hours, as investors await stronger signals that could break the current price stalemate.
The Bottom Line
While global liquidity remains an important backdrop for risk asset performance, Matrixport’s latest analysis suggests that Bitcoin’s next major move will likely require a more tangible catalyst—whether from within the crypto space or the broader economy.
Until then, traders and investors may need to brace for continued sideways action and uncertainty in the weeks ahead.
