Bitcoin 65% Crash Risk Returns As Fed Liquidity Evaporates: Not Just ‘Paper Hands’
GLJ Research analyst Gordon Johnson issued a warning about Bitcoin (CRYPTO: BTC) facing a potential 65% crash as Federal Reserve cash reserves reach critically low levels.
Fed Cash Reserves Hit Critical Low
The overnight reverse repurchase agreement (O/N RRP) facility has been “fully drained” for the first time since 2021, according to Johnson’s analysis.
“This isn’t a question of ‘paper hands.’ The O/N RRP is now fully drained – something we haven’t seen since it surged in 2021,” Johnson stated in response to recent Bitcoin volatility.
Liquidity Crunch Mirrors 2022 Conditions
Johnson’s research shows total U.S. liquidity tracking at a 79.4% correlation with S&P 500 performance. His analysis indicates that unless the Fed “abruptly abandons QT [quantitative tightening] & reverts to QE [quantitative easing], US liquidity is going to contract for …
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