Bitcoin’s next breakout will likely require more than just liquidity growth, as analysts question its impact.

Bitcoin (BTC) may stay in consolidation as analysts question whether liquidity growth alone can drive a rally, noting that while global liquidity often rises alongside BTC’s price, the connection might not be as strong as some traders think.

In an X post on Friday, March 28, Matrixport’s analysts noted that when central banks expand the money supply, some of that liquidity eventually flows into crypto markets. However, they cautioned that this doesn’t guarantee higher Bitcoin prices, as the relationship lacks a strong theoretical foundation.

“While a lag between money supply growth and Bitcoin’s price action may exist, there is no strong theoretical basis for why this should consistently be 13 weeks — the timeframe that currently offers the best visual correlation.”

Matrixport

The analysts also warned that comparing Bitcoin’s price with global liquidity could be misleading as both time series “are non-stationary — they trend over time — which can distort correlation analysis and lead to spurious results.”

Now, without a clear catalyst, Bitcoin’s price could continue moving sideways, Matrixport suggested, adding that apart from events like last year’s U.S. presidential election, the cryptocurrency has mostly traded sideways. While some traders still see liquidity trends as a key indicator, the analysts argue that crypto-native factors or macroeconomic policies may still be more useful.