Overview
When central banks expand their balance sheets (through QE or asset purchases), liquidity rises — typically supporting both equities and crypto.
Conversely, balance sheet contractions (QT) tend to drain liquidity, increasing systemic risk and lowering speculative exposure.

Formula (Latex Function format)

$LiquidityIndex = \sum_{i=1}^{n} CentralBankAssets_i$

Interpretation

• Expanding balance sheets: Easing conditions, bullish liquidity backdrop.

• Contracting balance sheets: Tightening, risk-off sentiment.

Available Metrics

• Central Bank Global

• Federal Reserve (US)

• European Central Bank

• People’s Bank of China

• Bank of Japan

• Reserve Bank of Australia

• Central Bank of Brazil

Insights
Combining central bank data reveals cross-market liquidity flows — often preceding price trends in global risk assets.