Global Liquidity Is Expanding Fast – Will Bitcoin React Like in Past Cycles?

Bitcoin (BTC) is facing strong bearish pressure, struggling to break above the $85,000 level as macro uncertainty weighs on the market. Since late January, BTC has lost over 29% of its value, with investors growing increasingly fearful of further downside. Global trade war fears and volatile macroeconomic conditions have put both the crypto and U.S. stock markets under pressure, leaving traders uncertain about the next major move for Bitcoin.

Despite the ongoing downtrend, some analysts see potential for a market reversal. Top analyst Ali Martinez shared insights on X, pointing out that global liquidity is expanding rapidly. Historically, this trend has been a bullish catalyst for Bitcoin, often leading to significant price surges when liquidity enters the market. If this pattern holds, BTC could see renewed buying pressure in the coming weeks.

However, in the short term, bears remain in control, and BTC must reclaim key technical levels before a recovery can begin. If macro conditions remain uncertain, Bitcoin could stay under pressure, potentially testing lower support levels before any meaningful bounce. The next few weeks will be critical in determining whether BTC can stabilize or if further losses are ahead.

Bitcoin Hits Lowest Levels Since November 2024

Bitcoin (BTC) is currently trading at its lowest levels since November 10, 2024, with bulls struggling to regain control. The market has remained in a strong downtrend since late January, and fear continues to push lower price targets, as many investors now question whether the Bitcoin bull cycle is over. With BTC failing to reclaim key resistance levels, sentiment remains decisively bearish, increasing the risk of further downside in the coming weeks.

Despite the ongoing decline, Martinez’s insights on X remark that global liquidity is expanding rapidly. Liquidity growth has been a driver for Bitcoin price increases, and if past trends hold, BTC could catch up around mid-April. However, for this scenario to unfold, bulls must defend key support levels and regain momentum in the coming weeks.

The broader market downturn has been largely influenced by macroeconomic uncertainty and rising volatility since the U.S. elections in November 2024. Concerns over global trade wars, unstable economic policies, and erratic market reactions have made it difficult for risk assets like Bitcoin to sustain any significant upward momentum. Given that these macroeconomic concerns remain unresolved, Bitcoin is likely to stay under pressure until market conditions show signs of improvement.

For now, bulls have a lot of work to do to reverse the bearish trend and bring BTC back above key technical levels. If liquidity expansion drives renewed buying pressure, the market could see a recovery. However, if macro conditions remain unfavorable, Bitcoin may continue to trade in a downward trajectory in the short term.

Bitcoin Struggles to Reclaim $85K

Bitcoin is currently trading at $83,300, with bulls struggling to regain momentum after weeks of selling pressure. The key level for a potential recovery remains $85,000, as this mark aligns closely with the 200-day moving average (MA). If BTC fails to break above this level soon, bearish sentiment is likely to persist, increasing the risk of further downside.

For Bitcoin to initiate a recovery rally, bulls must push above the 200-day MA quickly. A break and close above this level would signal renewed buying interest, potentially leading to a stronger move toward higher resistance zones. However, BTC’s struggles at this technical barrier indicate that market confidence remains weak, with traders hesitant to enter long positions amid growing uncertainty.

If Bitcoin fails to reclaim the 200-day MA in the coming days, the risk of a sharp drop below $80,000 increases significantly. A break below this psychological level could trigger further sell-offs, sending BTC toward lower demand zones. The next few trading sessions will be critical in determining whether BTC can reverse its recent losses or if the downtrend will continue into deeper territory.

Featured image from Dall-E, chart from TradingView