Tbh, Bitcoin doesn’t need a direct causal link to housing for housing data to matter indirectly.

The connection is housing to interest rates/FED policy to liquidity and risk appetite, then to BTC, not housing to BTC directly.

I understand that energy costs and regulation are Bitcoin-specific factors, but Bitcoin has also become a financial asset, so broader macro conditions also matter, with the 2022 tightening cycle being a good example, where the FED raised rates and tightened its balance sheet; financial conditions became significantly tighter, and risk assets, including Bitcoin, were put under pressure.

For sure, I wouldn’t say that weak housing data means Bitcoin will rally. I'd say it is a macroeconomic signal that could matter if it supports expectations of easier monetary policy.

The strength of that signal depends on what the FED does next.

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Yep, I believe the ordeal here is knowing why the housing market is weakening. A controlled cooling that eases inflation could give the FED room to cut rates without major economic damage, potentially improving liquidity and risk appetite, whereas if housing weakness is part of a broader economic contraction, investors could move toward cash and safer assets first, creating significant pressure on BTC.

The FED’s response and broader economic context remain the main players in this context.

If sellers are outweighing buyers, it then means there is a conundrum somewhere and the economy is not moving on a steady part of growth because ordinarily the demand is supposed to be higher than the supply but here the reverse is the case. however if rates are cut by the FED, THAT MEANS THEY WILL HAVE TO COME IN TO SUBSIDIZE THE HOUSING SCHEME FOR CITIZENS OR PAYING A CERTAIN AMOUNT TO THE HOUSE OWNERS AND THE BUYERS WILL PAY THE REST. I'm saying so because you cannot just ask house owners to just cut down their rate without a subsidy, some of them got this houses at an expensive rate, so the FED needs to do more. Hence they agree on doing that, a person can decide to purchase or use their crypto asset to get some of these housing at affordable rate.

Totally agree with all of this. Another point I think worth adding is that each of those items can be considered layers, each with its own respective timeframes: weak signal (housing data), direct channel like yields/Fed and the actual thesis (dedollarization). This can be helpful to remember especially when each of those items are moving in different directions.

In this case yields are rising (bearish near-term) and dedollarization momentum is rising (bullish long-term). In essence, on the surface it may be a wash, and BTC could continue to chop sideways for months to come despite our long-term thesis being completely valid.