U.S. LIQUIDITY RESEARCH
Dollar Liquidity and Bitcoin
Separate historical association from a reliable crypto timing signal.
Bitcoin is often described as highly sensitive to global liquidity, but that relationship changes with the sample, horizon and market regime. A visually similar chart is not enough to establish causality or trading value.
The monitoring layer joins ULI observations to forward asset returns and reports rank information coefficient, directional hit rate, a simple annualized Sharpe estimate and sample size across multiple horizons.
Results are in-sample and overlapping forward windows can exaggerate apparent stability. The evidence should be used to frame a hypothesis, not to promise a deterministic Bitcoin forecast.
MACRO TRADER LENS
How a macro trader can use this research
Use dollar liquidity as a medium-horizon Bitcoin regime filter, not a standalone timing model. Crypto-native leverage, flows and event risk can dominate the macro relationship for long stretches.
Separate macro from crypto beta
Track ULI alongside the broad dollar, real-rate conditions and Bitcoin's own trend. Crypto-native flows are relevant confirmation inputs but are not yet measured by this model.
Tilt, do not time mechanically
Use improving liquidity to test whether the medium-horizon distribution of returns is becoming more favorable; use deteriorating liquidity to tighten risk limits rather than assume an immediate decline.
Demand price participation
A constructive thesis is stronger when Bitcoin's trend and market breadth improve while the dollar and credit conditions do not contradict the move.
Respect crypto-specific shocks
Exchange failures, regulation, token-specific flows and leverage liquidations can overwhelm the macro signal. Re-test the relationship across samples and non-overlapping horizons.
Built from traceable sources
Federal Reserve and FRED series, New York Fed funding data, U.S. Treasury cash balances and cross-asset market prices.
Research information only — not investment advice.