Raoul Pal: Global Liquidity and BTC Correlation Reach 90%, Market in Historic Oversold State

Summary
Raoul Pal stated on March 8th that global liquidity is a key macro factor, highly correlated with BTC and NDX since 2012, with an annual growth of about 10%. He pointed out that liquidity remains accommodative and predicted that the US will further cut interest rates to stimulate disposable income. The crypto market is currently oversold, and the next two weeks will be a critical observation period.
According to Gate News, on March 8th, Raoul Pal posted on X platform that global liquidity is the most important macro factor in history, with a correlation of 90% with BTC and 97% with NDX since 2012, and an annual growth rate of about 10%, with no signs of slowing down. He noted that the GMI financial condition leads global liquidity by about 6 months and remains loose; US overall liquidity was suppressed during the shutdown but this indicator leads cryptocurrencies by about 3 months and has been accelerating upward from a low three months ago.
He stated that the business cycle is accelerating, and eSLR (the mechanism where banks enhance liquidity through credit and absorption of government bond issuance) is also rising and will further accelerate. Tax refunds are entering bank balance sheets, boosting credit creation tendencies and increasing liquidity. He believes the US will further cut interest rates, increasing disposable income and risk appetite; the CLARITY bill 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 US government’s support for cryptocurrencies has reached an all-time high.
He pointed out 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 a key focus period, and expects further upward movement.