@qusawenna
A contracting Fed balance sheet reduces USD liquidity, potentially affecting BTC inflows. Less liquidity can pressure risk assets, while expansion supports speculative markets. Monitoring correlation between balance sheet trends, BTC price, and macro sentiment provides insight into liquidity-driven movements. While not a direct determinant, balance sheet shrinkage often coincides with tighter market conditions, influencing institutional and retail allocation. Understanding these dynamics helps investors anticipate periods of constrained liquidity and potential volatility in BTC markets.
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