Bitcoin Rebound Anticipated in 10 Days Amid Fed Liquidity Surge

Bitcoin is facing a critical period over the next ten days that could pave the way for a price rebound, boosted by U.S. macroeconomic conditions. This insight comes from Tedtalksmacro, a financial analyst who closely monitors the interplay between Bitcoin’s price movements and the Federal Reserve’s (Fed) liquidity policies.

Despite a 3.2% decline in Bitcoin’s value for June, there’s optimism that the trend could reverse by the end of the month. Tedtalksmacro has pointed out that the BTC/USD pair often mirrors changes in Fed liquidity levels, a pattern evident for several months now. He commented with fascination about this regularity, suggesting that liquidity is about to bottom out and could soon surge again, thereby benefiting Bitcoin.

Supporting this theory, Tedtalksmacro shared a chart from his data repository, Talking Macro. The chart illustrates that Bitcoin’s price highs and lows align with corresponding peaks and troughs in Fed liquidity. For example, Bitcoin’s record peak of $73,800 in mid-March happened alongside a significant liquidity increase.

But how exactly is liquidity measured? Tedtalksmacro explains that it’s a blend of Fed assets, repo market activities, and treasury data. This comprehensive approach gives a detailed picture of how monetary policies impact asset prices, including Bitcoin.

On another front, Bitcoin’s short-term outlook is being influenced by changing dynamics in the U.S. spot Bitcoin exchange-traded funds (ETFs) market. After experiencing a spike in inflows—the second-highest on record—early June saw this trend flip with four consecutive days of net outflows. According to data from various monitoring firms, including the UK-based Farside, these outflows amounted to just over $700 million—remarkably less than the substantial $886 million inflow on June 4.

There’s growing anticipation for increased institutional interest in Bitcoin in the third quarter and beyond. This is particularly relevant as U.S. wirehouses are set to access spot ETF products. This event is highly anticipated by those closely watching Bitcoin’s evolution into a mainstream institutional investment.

One prominent figure in this arena is Cathie Wood, CEO of ARK Invest, which is one of the spot ETF providers. She points out that current price actions have occurred even before any formal approval from platforms, indicating that the real excitement might just be starting. In a March interview, she emphasized that the market hasn’t even scratched the surface of potential institutional involvement in Bitcoin.

While Bitcoin faces some immediate challenges, the broader outlook remains hopeful, supported by upcoming shifts in Fed liquidity and new institutional avenues. The coming days are poised to be a pivotal period for Bitcoin, potentially igniting a fresh upward trajectory.