tells<\/a> his 512,000 YouTube subscribers that over the long term, Bitcoin is going to experience a \u201creally difficult time\u201d as liquidity tightens.<\/p>\nAccording to the widely followed crypto analyst, Bitcoin\u2019s price direction is heavily determined by monetary policy.<\/p>\n
\u201cWe cannot sit here and say that Bitcoin is this hedge against money supply debasement and that it should go up when there\u2019s new money in the system like it has been for the past decade, and then simply ignore when it\u2019s [money supply] contracting.<\/i><\/p>\n
Bitcoin works in the opposite effect here. It hedges that money debasement to the upside \u2013 when you print more money, Bitcoin\u2019s value should obviously increase to some degree. And during periods of times of monetary contraction, it should struggle. It should generally be moving lower here to the downside\u2026<\/i><\/p>\n
Liquidity is the lifeline, it is the blood of all financial assets to continue appreciating.\u201d<\/i><\/p>\n
According to Merten, while Bitcoin has demonstrated some resiliency over the past couple of months, that could change if sentiment turns bearish.<\/p>\n
\u201cIf investors who are buying up here [the $25,000 \u2013 $32,000 range], who are providing that current support while some people are selling, if they don\u2019t see that there are enough other bulls on the market who are willing to market buy alongside them and eat up the asks on the order book and continue pushing prices higher\u2026 <\/i><\/p>\n
If all those who have been market buying for the past couple of months realize that there\u2019s really not enough momentum to clear through this prior support range that\u2019s now acting as the resistance between $28,000 and $32,000, people are going to start cashing out.\u201d<\/i><\/p>\nSource: Nicholas Merten\/YouTube<\/figcaption><\/figure>\nBitcoin is trading at $27,715 at time of writing.<\/p>\n