U.S. liquidity may be bottoming out, according to Capriole Investments founder Charles Edwards.The vibes in the Bitcoin and crypto community have been anything but immaculate in the past two months. After blistering price rallies in Q4 2024, many had anticipated more of the same in Q1 2025, especially in light of President Donald Trump's crypto-friendly stance. But reality has been quite the opposite.Bitcoin has tanked almost 25% from its highs, and several altcoins have lost double that. Amidst this rout, one analyst has highlighted a potential lifeline even as others assert that we are now in a bear market.U.S. Liquidity Finds Bottom?According to Capriole Investments founder Charles Edwards, U.S. liquidity may be bottoming out.In an X post on Tuesday, March 18, Edwards asserted that the metric was flashing "the first signs" of what could be a major multi-year bottom. Specifically, he noted that the metric appeared to be forming "an Eve/Adam bottom," which refers to a typically powerful reversal pattern combining a V (Adam) and U (Eve) shaped candlestick formation. It acts similar to a double bottom.US liquidity imposed on Bitcoin price chart. Source: Charles EdwardsUS liquidity imposed on Bitcoin price chart. Source: Charles EdwardsWhy It Matters for BitcoinU.S. liquidity finding a bottom and rising is important for Bitcoin as excess liquidity often finds its way to risk markets like crypto. As highlighted by Capriole, crypto's 2021 bull cycle was largely attributed to a rise in this liquidity. However, it has remained largely flat in the present cycle, explaining some of the market's struggles.The hedge fund founder noted that 2025 could be the right time for the Federal Reserve to move away from economic tightening as Trump's tariff policies spark recession concerns.The potential U.S. liquidity bottom formation comes as analysts like CryptoQuant CEO Ki Young Ju have asserted that we are in a bear market, warning of continued sideways or even bearish price movement in the coming months. Young Ju specifically pointed to a lack of fresh liquidity in his outlook.While a potential boost in U.S. liquidity could theoretically invalidate Young Ju's thesis, it does take a while for the liquidity to flow into crypto markets.
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