Sup everyone,
if you're active on twitter or have been looking around for crypto trade ideas you might have stumbled upon the Global Liquidity Index chart (at least I have).
I've stumbled upon it a few months back and have been testing it ever since, let me tell you what this chart is about:
The Global Liquidity Index basically measures how much money is flowing through global markets—think of it like the pulse of the financial system... traders and investors use it to get a sense of overall market conditions, liquidity availability, and risk appetite.
Now, here’s the cool thing: when you layer the Global Liquidity Index onto the Bitcoin chart, you notice something interesting—
BTCUSD tends to react, but with a delay. Typically, there's about a 2-3 month lag. If global liquidity spikes or makes a sharp V-shaped recovery, Bitcoin usually mirrors this movement roughly 80 days later.
Why does this happen? Well, Bitcoin is a highly speculative asset, and institutions—especially banks—often wait to see solid liquidity signals before moving their capital into riskier assets like crypto. They prefer confirmation over speculation, which explains the delay.
So, in simple terms, by tracking global liquidity, you get a pretty useful heads-up about where Bitcoin might be headed a couple of months down the road.
The Global Liquidity Index is essentially a snapshot showing how much money central banks and financial institutions are injecting or pulling out of the global economy. Think of it like a big gauge tracking how "easy" or "tight" money conditions are worldwide.
It usually takes into account factors like:
When liquidity is abundant, there's more money sloshing around looking for places to invest. That typically pushes up asset prices—including speculative ones like Bitcoin—as investors seek higher returns. Conversely, when liquidity tightens (like when central banks raise interest rates or pull back stimulus), money becomes scarcer, risk appetite shrinks, and assets tend to dip.
So, when you're watching the Global Liquidity Index, you're basically monitoring how central banks and institutions are influencing market sentiment and investment behaviors, which eventually impacts speculative assets like Bitcoin—but with that notable delay we talked about earlier.
Practically speaking, here's how you apply the Global Liquidity Index to Bitcoin:
You watch for major turning points—peaks, bottoms, or sharp reversals—in global liquidity. Once you spot one, mark your calendar about 2–3 months forward (around 80 days). That’s usually when Bitcoin mirrors that move.
So, for instance, if the Global Liquidity Index sharply rebounds upward (a V-shaped recovery), you'd expect BTC to follow with a rally roughly two to three months later. On the flip side, if liquidity peaks and starts declining, it's a heads-up that Bitcoin could face downward pressure within the next few months.
This gives you a practical edge—you're essentially previewing BTC’s possible moves.
All things said, if you look at BTC's chart right now and apply the Global Liquidity Index to it you can see how the second has broken its previous high a few months back, but BTC yet has to break its, you can arrive to the conclusions here....
With no reversal in sight (for now) in the Global Liquidity Index, there don't seem to be signs of "spoofing", no case in which the index starts declining and so makes traders who know about this delay start to sell earlier than the delay.
End of the story - things look promising for BTC and you should definitely keep the Global Liquidity Index in your list of indicators.
if you're active on twitter or have been looking around for crypto trade ideas you might have stumbled upon the Global Liquidity Index chart (at least I have).
I've stumbled upon it a few months back and have been testing it ever since, let me tell you what this chart is about:
The Global Liquidity Index basically measures how much money is flowing through global markets—think of it like the pulse of the financial system... traders and investors use it to get a sense of overall market conditions, liquidity availability, and risk appetite.
Now, here’s the cool thing: when you layer the Global Liquidity Index onto the Bitcoin chart, you notice something interesting—
BTCUSD tends to react, but with a delay. Typically, there's about a 2-3 month lag. If global liquidity spikes or makes a sharp V-shaped recovery, Bitcoin usually mirrors this movement roughly 80 days later.Why does this happen? Well, Bitcoin is a highly speculative asset, and institutions—especially banks—often wait to see solid liquidity signals before moving their capital into riskier assets like crypto. They prefer confirmation over speculation, which explains the delay.
So, in simple terms, by tracking global liquidity, you get a pretty useful heads-up about where Bitcoin might be headed a couple of months down the road.
The Global Liquidity Index is essentially a snapshot showing how much money central banks and financial institutions are injecting or pulling out of the global economy. Think of it like a big gauge tracking how "easy" or "tight" money conditions are worldwide.
It usually takes into account factors like:
When liquidity is abundant, there's more money sloshing around looking for places to invest. That typically pushes up asset prices—including speculative ones like Bitcoin—as investors seek higher returns. Conversely, when liquidity tightens (like when central banks raise interest rates or pull back stimulus), money becomes scarcer, risk appetite shrinks, and assets tend to dip.
So, when you're watching the Global Liquidity Index, you're basically monitoring how central banks and institutions are influencing market sentiment and investment behaviors, which eventually impacts speculative assets like Bitcoin—but with that notable delay we talked about earlier.
Practically speaking, here's how you apply the Global Liquidity Index to Bitcoin:
You watch for major turning points—peaks, bottoms, or sharp reversals—in global liquidity. Once you spot one, mark your calendar about 2–3 months forward (around 80 days). That’s usually when Bitcoin mirrors that move.
So, for instance, if the Global Liquidity Index sharply rebounds upward (a V-shaped recovery), you'd expect BTC to follow with a rally roughly two to three months later. On the flip side, if liquidity peaks and starts declining, it's a heads-up that Bitcoin could face downward pressure within the next few months.
This gives you a practical edge—you're essentially previewing BTC’s possible moves.
All things said, if you look at BTC's chart right now and apply the Global Liquidity Index to it you can see how the second has broken its previous high a few months back, but BTC yet has to break its, you can arrive to the conclusions here....
With no reversal in sight (for now) in the Global Liquidity Index, there don't seem to be signs of "spoofing", no case in which the index starts declining and so makes traders who know about this delay start to sell earlier than the delay.
End of the story - things look promising for BTC and you should definitely keep the Global Liquidity Index in your list of indicators.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.