The US Federal Reserve — the Fed — is the most powerful money authority on earth. Fed liquidity simply means how much money the Fed is adding to, or pulling out of, the financial system at any given moment.
When the Fed is adding money, there is more cash sloshing around looking for a home — and a good chunk of it ends up flowing into assets like shares and crypto, quietly lifting their prices. When the Fed drains money back out, the opposite happens: there is less to go round, and prices start to feel the squeeze.
A popular idea is that this money tide moves before crypto does, often quoted as two to three months ahead of Bitcoin. When we checked it on our own data (weekly, 2015 to 2026), the link was loose: at a two-to-three-month gap the fit was weak, and most of the connection we did find came from one period, late 2020 to 2022. So it is a backdrop to keep in mind, not a way to see the wave coming.