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Snow Forecast: Bitcoin Liquidity & Crypto Outlook

Tuesday Nov 18 2025 05:10

Duration

2 min

  1. 1. Snow Forecast: Bitcoin Liquidity & Crypto Outlook

  2. 1.1 The Relationship Between Dollar Liquidity and Bitcoin

  3. 1.2 Monetary Policy Swings and Their Impact

  4. 1.3 The Role of ETFs and Digital Asset Trusts (DATs)

  5. 1.4 A Call for Action from the U.S. Government

  6. 1.5 Long-Term Perspective

  7. 1.6 Similarities with the Past

  8. 1.7 The Bull Case

  9. 1.8 Maelstrom's Position

  10. 1.9 Summary and Outlook

Snow Forecast: Bitcoin Liquidity & Crypto Outlook

Welcome to another analysis of the financial markets, where we blend weather forecasting with financial strategies. Much like watching weather patterns to predict a good ski season in Hokkaido, we analyze liquidity flows to forecast Bitcoin movements.

The Relationship Between Dollar Liquidity and Bitcoin

Bitcoin serves as a barometer for global fiat liquidity. Its trading hinges on expectations of future fiat supply. However, these expectations are often influenced by politics, which can shift rapidly and impact market sentiment.

Monetary Policy Swings and Their Impact

We've seen examples of how politicians can abruptly change course, affecting markets. For example, after the 'Massive Tariff Day' in April 2025, a policy shift led to a Bitcoin rally. However, recently, the dollar liquidity forecast has deteriorated, leading to a drop in Bitcoin's value.

The Role of ETFs and Digital Asset Trusts (DATs)

Previously, ETF inflows and capital flows into DATs contributed to Bitcoin's rise, despite declining liquidity. However, this landscape has changed, as ETF arbitrage incentives are no longer as strong.

A Call for Action from the U.S. Government

Now is the time for the U.S. government to show evidence of its ability to influence liquidity or acknowledge its inability to do so. The adoption of affordability-themed strategies by the Democratic party adds another layer of complexity to the landscape.

Long-Term Perspective

For those with a long-term perspective, short-term hiccups in fiat creation may not be significant. If the Republicans can't print enough money, stock and bond markets may crash, forcing both parties to revert to easy money policies.

Similarities with the Past

There are similarities between the market setups in the second half of 2023 and the second half of 2025. 'Buffalo Bill' needs to find a way to reshape the market in favor of the Republicans.

The Bull Case

A potential bull case is that the Treasury General Account will be drawn down, adding liquidity to the system. Additionally, the Federal Reserve may stop balance sheet reduction and resume quantitative easing.

Maelstrom's Position

I have increased our US Dollar stablecoin allocations in anticipation of lower crypto prices. In the short term, I believe Zcash ($ZEC) may outperform due to its focus on privacy.

Summary and Outlook

The recent decline in Bitcoin's price, coupled with other economic indicators, suggests a credit event may be brewing. A correction in the stock market could occur, potentially prompting the Federal Reserve and Treasury to implement measures to stimulate the economy. While Bitcoin may drop to $80k-$85k during this period, it could rally to $200k-$250k by year-end if authorities can successfully resume printing money.

Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.

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Written by:

Emma Rose

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