| | | | Low Liquidity Plaguing Market to Start 2025
We are seeing very low levels of market liquidity. That means conditions are ripe for a potential sudden drop correction. I will share my chart, but please be careful trading!
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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How Inflation Could Drive Gold and Bitcoin Higher in 2025
The specter of inflation is once again looming over the global economy. With central banks around the world pumping liquidity into their systems to revive faltering economies — particularly in places like China — inflationary pressures are almost inevitable.
And when inflation rises, assets like gold and Bitcoin tend to shine.
Gold has long been considered a safe haven during times of economic uncertainty and rising inflation. When central banks engage in quantitative easing and inject more money into the economy, the value of fiat currencies tends to decline. Gold, as a tangible asset with intrinsic value, benefits from this environment.
In 2025, the setup for gold looks promising.
It’s already been trending higher over the long term, unlike some other commodities that stagnate or decline. If inflation resurges due to central bank stimulus, we could see gold break through key resistance levels. Watch for moves above the recent highs as a signal of continued strength.
Bitcoin (BTC) is often referred to as "digital gold" — a title that has become increasingly fitting over the years. As central banks print more money, the supply of Bitcoin remains capped at 21 million, making it inherently deflationary.
We’ve already seen Bitcoin surge past $70,000 recently, and its long-term uptrend remains intact. However, caution is warranted as Bitcoin still faces resistance around the $100,000 level.
If inflationary pressures accelerate, Bitcoin could see another major rally, particularly as institutional investors look for alternatives to traditional hedges like gold.
China’s Influence and Central Bank Actions
China’s economy has been struggling, and policymakers are ramping up fiscal stimulus to boost growth. While these measures may lift the economy temporarily, they also contribute to inflation. The ripple effects are likely to impact global markets, driving up demand for assets like gold and Bitcoin that thrive in inflationary environments.
But there’s a catch — the Federal Reserve and other central banks may attempt to counteract inflation by raising interest rates again.
If rates rise too quickly, it could put pressure on both gold and Bitcoin, as higher yields make fixed-income investments more attractive. The key will be to monitor how central banks balance their fight against inflation with the need to support economic growth.
For traders and investors, it’s critical to keep an eye on global liquidity trends and central bank policies. Inflation is a double-edged sword, and while it can boost assets like gold and Bitcoin, it also brings volatility.
Use technical levels — like Bitcoin’s $100,000 resistance and gold’s recent highs — to guide your trades.
Today’s Daily Chart Setup: MKS Instruments (MKSI)
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