The current Bitcoin market trajectory is a complex interplay between macroeconomic liquidity and industry-specific recovery. Lyn Alden highlights how the U.S. Treasury’s drawdown of its cash account to manage the debt ceiling has temporarily offset Federal Reserve quantitative tightening, creating a window of improved liquidity that allowed Bitcoin to recover from the FTX collapse. However, a potential liquidity crunch looms in the second half of the year when the Treasury must refill its account, likely sucking capital out of the markets. Parker Lewis reinforces this caution, noting that while Bitcoin's long-term value proposition is independent of central bank actions, the Federal Reserve remains the dominant force in short-term pricing. Investors should prepare for significant volatility and potential 50% drawdowns during dollar liquidity crises, maintaining "dry powder" while viewing current price levels as a deep value zone for a three-to-five-year horizon.
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