Since March last year, Bitcoin has broken through the high of 70,000, but then experienced a period of volatility, and about four months have passed. The past week, especially last night, was bloody, which shows that liquidity is very insufficient. The following is a summary of the main reasons for insufficient liquidity:
1) As we all know, in the context of rising interest rates, US Treasury bonds have become a stable and risk-free source of income for large funds. This has led to insufficient liquidity in the entire market, and even Tether and Circle have become the top 18 holders.
2) The European Cup has also had a certain impact on liquidity. After all, fans can now use U to settle, so both bookmakers and retail investors will transfer part of the liquidity for betting.
3) Bitcoin ecology and second-layer technology have pledged a large number of tokens and locked liquidity. Although the current stock of funds in the market is comparable to the peak of the past bull market, altcoins have generally fallen, indicating that funds are not traded in the market.
4) Many institutions have been buying ETFs at the bottom, but at the same time using futures shorting for arbitrage and hedging. These hedging institutions have not stopped operating, making it difficult for the bull market to start.
I think the most important thing at the moment is the US interest rate cut. The interest the United States has to pay now is as high as its military expenditure (see Figure 2). If interest rates are not lowered, more banks will go bankrupt, triggering a financial crisis.
