#GateioInto11

How to Track Liquidity in Crypto:

Liquidity refers to the amount of money available in the economy. It's like water in the ocean. When there's a lot of water, all boats (or, in this case, cryptocurrency) can easily float higher.

Liquidity measurement: We use 'M2' to measure liquidity. The M2 includes all the money that people own, both in cash and in their bank accounts.

The impact of liquidity: When M2 increases, it means that people have more money available. This usually happens due to lower interest rates or the government's printing of more money. With more money available, people tend to invest, which boosts the cryptocurrency market and drives up prices.

The Cycle of Markets: Like the tides of the ocean, the amount of money available (liquidity) rises and falls. This fluctuation directly affects the market. When liquidity increases, cryptocurrencies go up. When liquidity decreases, cryptocurrencies tend to fall.

The importance of global liquidity: Global liquidity is like the first domino in a row; When it falls, everything else suffers. It tends to impact the stock market, as more liquidity lowers borrowing costs. As M2 increases, greed can also increase. This leads people to look for higher profits in the cryptocurrency market.

The source of liquidity: So where does this crucial liquidity come from? Mainly from the actions of governments, such as changing interest rates or increasing government spending. These policies can increase or decrease the amount of money circulating in the economy.