Raoul Pal: Global liquidity and BTC correlation reach 90%, and the market is in a historically oversold state

Gate News reports that on March 8, Raoul Pal posted on X stating that global liquidity is the most important macro factor in history. Since 2012, its correlation with BTC has been 90%, and with NDX 97%, with an annual growth rate of about 10% and no signs of slowing down. He pointed out that the GMI financial condition leads global liquidity by about six months and remains accommodative; U.S. overall liquidity was suppressed during the shutdown but this indicator leads cryptocurrencies by about three months and has been accelerating upward from a low three months ago. He said the business cycle is accelerating, and the eSLR (a mechanism where banks boost liquidity through lending and absorbing government bond issuance) is also rising and will further accelerate. Tax refunds are entering bank balance sheets, increasing credit creation tendencies and thus boosting liquidity. He believes the U.S. will cut interest rates further, increasing disposable income and risk appetite; the CLARITY Act is expected to pass, driving capital inflows; last year, stablecoin issuance grew by 50% and is still accelerating, with trading volume reaching trillions of dollars; the U.S. government’s support for cryptocurrencies has reached an all-time high. He noted that most indicators show the crypto market is in the most oversold phase in history, with weekly DeMark indicators providing very solid support in two weeks, and daily DeMark indicators also stacking. He stated that the risk factor is the duration of high oil prices, with the next two weeks being critical, and he expects further upward movement.