Strong Dollar Poses Challenges for Bitcoin Outlook: Matrixport
Join us live, let's chat in the live room
Bitcoin Faces Short-Term Pressure: Impact of Global Liquidity Tightening After Trump's Re-election
According to the latest research report from Matrixport and analyst Markus Thielen, Bitcoin may face a short-term correction or consolidation phase, primarily due to the macroeconomic backdrop of global liquidity tightening and a strong dollar. Below is a detailed analysis of the situation.
Main Reason: Global Liquidity Tightening
Trump's Re-election and the Strong Dollar:
After Trump's re-election, a stronger dollar may emerge, meaning global liquidity will become more strained. Historically, a strong dollar typically leads to capital withdrawal from high-risk assets (such as Bitcoin) because dollar-denominated assets are generally more attractive, especially during liquidity tightening.
According to Markus Thielen's analysis, the process of liquidity tightening may put pressure on Bitcoin's price approximately 13 weeks later, leading to a decline or consolidation in price.
Federal Reserve's Position:
Currently, with rising U.S. bond yields, the market expects the Federal Reserve may adopt a more hawkish stance on interest rate hikes, and rate cuts may be delayed, which slows the inflow of capital into Bitcoin and other risk assets.
Federal Reserve officials have suggested that rate cuts in 2025 will only occur twice, far below market expectations, indicating that dollar liquidity will remain tight for some time, impacting the inflow into Bitcoin.
Short-Term and Long-Term Outlook:
Short-Term Pressure and Consolidation Phase:
As dollar liquidity tightens, Bitcoin may enter a consolidation phase or experience a short-term correction. Especially when dollar-denominated liquidity weakens, Bitcoin's price may face certain volatility.
Based on historical experience, this correction phase typically lasts for several weeks, so in the short term, Bitcoin's upward momentum may be suppressed.
Join us live, let's chat in the live room
