A recent analysis by PANews emphasizes that liquidity, rather than narratives, is the primary driver of cryptocurrency bull cycles. The report suggests that market excitement and momentum are fueled by capital inflows, which can transform weak ideas into widely accepted trends. During periods of abundant liquidity, fear of missing out (FOMO) further accelerates market momentum. Conversely, when liquidity diminishes, even robust themes struggle to gain traction.
The research introduces a global asset rotation framework, categorizing cryptocurrencies as liquidity-sensitive alternative assets. It highlights the influence of macroeconomic factors such as interest rates, inflation, and risk appetite on the movement of crypto markets.
Liquidity, Not Narratives, Drives Crypto Bull Cycles
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