Jamie Coutts, crypto analyst at Bloomberg Intelligence, issued a warning about Bitcoin, saying that the asset is vulnerable to liquidity crunch.
Speaking on X, the analyst said that Bitcoin gave an “exit signal” in mid-July and that we encountered a price approximately 11% higher than the current price at that time.
Emphasis on liquidity breadth
Coutts pointed out that Bitcoin needs a global liquidity expansion for its rise.
“Meanwhile, global liquidity contraction (money supply and central banks’ balance sheets) has slowed. Despite this, the situation still looks extremely negative. “Bitcoin is unlikely to rise until the situation reverses.”
The analyst made the following statements regarding liquidity levels in the USA:
“Although the US liquidity index has been at a higher level recently, it has been moving quickly in a horizontal range. “Unless there is a meaningful rise at this level, which can only happen with the Fed’s policy change, this does not seem likely in the short term.”
The Bloomberg analyst also spoke about the possibility of approval of the spot Bitcoin ETF, saying that if a potential approval comes, it could be a positive catalyst for the crypto sector in the long term. However, the analyst thinks that even in such a situation, institutional investors’ demand for digital assets will remain at a low level until liquidity increases.
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