JUST (jst) 
Market analysts have issued a warning that Bitcoin may experience short-term pressure due to tightening global liquidity following the Trump re-election.
Global Liquidity Tightens: Impact on Bitcoin Price
Matrixport, Asia’s blockchain analysis hub, published a research note on January 8, advising crypto investors to prepare for a short-term slowdown as global liquidity tightens. According to crypto analyst Markus Thielen, the tightening of global liquidity is a result of a stronger US dollar following the Trump re-election. Historically, shifts in global liquidity tend to affect Bitcoin’s price approximately 13 weeks later.
Consolidation Phase: What to Expect
As liquidity tightens, Bitcoin could enter a consolidation phase, Thielen warns. This phase is often seen when dollar-denominated liquidity weakens. Despite the potential dip, the analyst expects this phase to be short-lived. Thielen notes, “The broader outlook for risk assets, particularly Bitcoin, remains constructive.”
“Traders may act more cautiously when liquidity indicators are less favorable, as they’ve been reliable in the past.”
The warning comes as spot Bitcoin exchange-traded funds experienced a sharp drop in inflows on January 7, following a 5% decline in Bitcoin’s price. This decline was fueled by growing expectations of a more hawkish Federal Reserve.
Market Trends: Key Factors to Consider
Several key factors are influencing the current market trends, including:
- Rising U.S. bond yields, sparking expectations of a tougher stance from the Federal Reserve
- Officials signaling only two interest rate cuts in 2025, fewer than expected
- Growing caution among investors ahead of important economic updates
Despite the potential short-term slowdown, the long-term outlook for Bitcoin remains positive. For the latest updates and news on the crypto market, continue reading on Global Crypto News.
