Onchain Systems Something's brewing..
Joined October 2024
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9/12 Putting it together:
GIL shows Growth (3.8% GDP, housing stable) + Inflation (2.1% PCE, falling) + Liquidity ($10T global expansion, Fed pivot) = positive for risk assets.
The 2025 correction is a *liquidity rebalancing* (Treasury vs FED), not a structural break.
5.1/12 This divergence is key.
M2 is a liability measure; it doesn't capture collateral velocity. The GLI measures usable liquidity. When the Treasury issues bills (monetizing deficits), it pumps M2 but starves repo markets of collateral.
That's why repo rates spiked in October: collateral scarcity, not cash scarcity.
4.2/12 Rate cut probability: around 50% for Dec.
But with jobs data delayed by the shutdown and the pre-blackout trend weakening, the 3-month average (once released) will push odds back towards a probable rate cut.
Weak employment + low inflation = dovish pivot.
4.1/12 The Fed's Dec 1 QT end is a technical response to repo strains, not stimulus.
Michael Howell: "Fed liquidity improvement is insufficient... markets are still short of cash." The $500B TGA drawdown injects cash, but he warns this is "not-QE-QE": maturity transformation, not credit easing.
Here a reminder on what FED Liquidity entails.
4/12 Liquidity is the pivot.
@crossbordercap's GLI shows global liquidity expanding at a $10 trillion annual rate through July 2025.
This is not a "vibe". It's central bank balance sheets, shadow banking credit, and cross-border flows.
The system is awash, but composition matters.
1/ Bitcoin has become the release valve for global liquidity. When TradFi pipes are clogged, capital leaks into crypto.
Treasury companies now bridge the two worlds, acting as high-beta liquidity proxies.
The big question: what's the next $MSTR?
Weekly view: $BTC printed a new ATH last week, now consolidating.
Key levels we’re watching:
- 114,147 (weekly level)
- 111,950 (August low)
- 110,000 (Value Area High)
Losing these opens downside acceptance into prior range, with PoC near 96k.
On the monthly, $BTC remains in an uptrend after four strong green candles.
We’ve entered a consolidation phase:
Tariff lows → impulsive rally
PPI came in hot Friday
Market now pricing out a 50 bps cut, leaning toward 25 cut bps in September
BTC.D captures the whole market, yes. Basically ETH/BTC is the biggest contributor and leading indicator for alts.
ETH NEEDS TO OUTPERFORM BTC FOR ALTS TO RALLY. If ETH is underperforming, the altrun will be subdued.
As per image, I will go hard alts once PoC is reclaimed
4️⃣Macro Environment: Mixed Signals 📉📈
Core inflation down to 3.1%, but Core PCE rose unexpectedly to 0.4% MoM.
Economic growth slowed sharply to 0.3% for Q1 due to tariffs, yet the labor market remains resilient.
Inflation MUST come down for the FED to be able to be flexible
@tether was the 7th largest buyer of U.S. bonds in 2024, solidifying themselves as strategic partners for the US, ahead of Taiwan and Canada.
@DavidSacks alluded regulations may come as early as H1 '25, and recognizes their importance for the U.S.' debt financing.
