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Crypto eyeing ‘historic move’ as ‘tons of new liquidity’ return to market

Crypto eyeing 'historic move' as 'tons of new liquidity' return to market

For months, the crypto markets, spearheaded by Bitcoin (BTC), languished in a constrained and subdued trading range, lacking significant catalysts. 

However, a paradigm shift unfolded in the past month, fueled by renewed optimism. The resurgence stems from mounting confidence that US regulators may greenlight the inaugural spot Bitcoin exchange-traded fund (ETF) – perhaps even before the end of 2023. 

This newfound positivity propelled BTC beyond $37,000 last week, marking its first ascent above that threshold since April 2022. 

Crucially, alongside this resurgence of optimism came a resurgence of liquidity, historically indicative of impending significant bull markets.

Crypto market adds $600 billion in liquidity in a year

For the first time in several years, the cryptocurrency markets are witnessing a return of “tons of new liquidity, The Kobeissi Letter, a well-known commentator of the global capital markets, said in a November 12 post on X.

According to the account, crypto has added $600 billion in value over the past year, marking a 75% jump. Over the same period, Bitcoin’s value surged by 120%. 

Crypto market 1-year liquidity change. Source: The Kobeissi Letter

“This comes after years of consistent outflows from crypto markets.”

– The Kobeissi noted.

Most notably, the resurgence in liquidity is seen as a vital bullish indicator. As the popular X account put it, “A return of liquidity always causes historic moves in crypto.”

The total crypto market cap is currently sitting at around $1.46 trillion, the highest since May 2022. 

Bitcoin price analysis

At the time of writing on November 13, BTC was changing hands at $36,996, down 0.4% on the day.

The maiden cryptocurrency gained around 4% over the past week and more than 37% on the monthly chart, adding roughly $200 billion in market cap over this period.

BTC 1-month price chart. Source: Finbold

Year-to-date, BTC is up 123%, marking an impressive surge from the $16,600 it was trading at on January 1, 2023.

On November 10, pseudonymous crypto analyst el_crypto_prof said that BTC may be facing “the biggest bull run ever.” His analysis was predominantly based on the emergence of a rare buy signal on the M-Chart, which last emerged eight years ago. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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