ayes highlights the high chances to a $57 billion net liquidity boost in the first quarter as a result of changes in Federal Reserve and Treasury policies. A $237 billion increase in Reverse Repo Facility may offset $180 billion reduction in quantitative easing from financial markets. This in turn could affect the crypto market very positively.
Budget of Treasury and Debt Ceiling
Hayes estimates that with the Treasury General Account at $722 billion, spending will rise before the debt ceiling debates. This depletion could lead to market speculation and maintain the pace until the end of March.
Political and Market Dynamics
Furthermore, Hayes affirms that there is one important thing to keep in mind that could shake out the market. The reason being, possible disappointment in regards to Trump’s crypto policies is a threat to the markets. On the other hand, Hayes sees strong liquidity conditions as supportive of Bitcoin and risk assets regardless of the political result. However on the short term, the market could face some challenges
Timing the Market Peak
According to Hayes, the first two weeks in April were important, especially when US tax deadlines are considered. He expects a market consolidation and trading ranging before Q3 arrives to enhance the liquidity situation.
Liquidity Drivers
While liquidity factors paint a rosy picture for the near term, Hayes warns of a potential April sell-off and recommends clients take protective stakes before rebounding in Q3 2025.
