According to the National Financial Conditions Index (NFCI), liquidity levels in the U.S. have reached a two-year high, which may positively impact Bitcoin's price.
Liquidity Data in the U.S.
Data from NFCI shows that liquidity levels are currently at their highest in over two years, occurring before the Federal Reserve's aggressive rate hike campaign began.
Impact on Bitcoin Price
Historically, Bitcoin has performed best during periods of looser financial conditions, which increase access to capital and risk appetite. Ecoinometrics stated, "That’s a strong macro setup for Bitcoin."
Historical Context and Bitcoin's Future
Charts highlight key turning points: the top of the previous bull market in 2021 occurred during peak liquidity, while the bear market bottom followed tightening conditions in 2022–2023. With two years of easing, the current environment resembles the early stages of past bull runs. If liquidity continues to improve, this could support further expansion of Bitcoin's price.
Overall, the data suggests that an improvement in financial conditions may create a favorable environment for Bitcoin's growth, as indicated by historical trends and current macroeconomic conditions.
