Famous Bitcoin analyst Nicholas Merten warns of liquidity risk for BTC in the macro environment as Bitcoin heads towards its halving. The analyst’s warning attracts the attention of BTC investors. Let’s look at the details.
Navigating the risky waters of Bitcoin BTC
Bitcoin analyst Nicholas Merten, who has 512,000 subscribers on YouTube, draws attention to one issue. It warns about a potential risk lurking in the current macroeconomic environment that could affect the future of Bitcoin. According to the analyst, there is a long-term challenge. Liquidity squeeze attracts attention here.
Merten emphasizes that in the long run, Bitcoin could face significant difficulty as liquidity in financial markets tightens. Additionally, Merten notes that Bitcoin’s price trajectory is intricately tied to monetary policy. On the other hand, he underlines that it is very important to understand this connection.
BTC and monetary policy: A complex relationship
Merten underlines the relationship between Bitcoin and monetary policy. Accordingly, he states that Bitcoin’s historical role as a hedge against the depreciation of the money supply should not be ignored. Additionally, when new money enters the system, Bitcoin often experiences price increases. However, the situation changes during periods of monetary contraction.
He explains this situation as follows: “It hedges the depreciation of money upwards. Accordingly, when you print more money, the value of Bitcoin must increase to some degree. It has to struggle during periods of monetary contraction. Here Bitcoin should generally move downwards…”
The critical role of liquidity
According to Merten, liquidity is the lifeblood of all financial assets. It is also necessary for them to gain value. Despite BTC’s recent resistance, Merten warns that sentiment could change quickly if bearish sentiment prevails.
Merten points to the current support range in Bitcoin BTC in the $25,000 – $32,000 region. Accordingly, he emphasizes that the level is very important for investors buying in this range. However, if they perceive a lack of momentum and market buying interest that will push prices even higher, this could trigger a selling wave.
Critical levels for Bitcoin
According to the analyst, there is an important phase for everyone who has been buying in the market in the last few months. Accordingly, if Bitcoin realizes that there really isn’t enough momentum to break through this previous support range, which currently acts as resistance on BTC between $28,000 and $32,000, people will start withdrawing their money.
There is some truth to this ever-evolving crypto landscape. Understanding Bitcoin’s vulnerability to changes in liquidity and sentiment becomes crucial. While Bitcoin has demonstrated resilience, its ability to withstand future challenges in the face of changing macroeconomic dynamics is important. When we look at it as Kriptokoin.com, it continues to be a subject of intense interest for both investors and analysts.
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