Bitcoin Price May Crash Below $88,000 On Global M2 Money Correlation

by

As a seasoned researcher with over two decades of experience in financial markets and a keen interest in digital currencies, I find myself intrigued by the current state of Bitcoin. The recent correction to $92,864 from its high of $100K is not surprising, given the historical correlation between BTC price movement and Global M2 Money Supply.

If Bitcoin‘s price adjustment adheres to the Global M2 money supply pattern, it could drop to around $88,000 or even lower. Over the last four days, Bitcoin has already experienced a decrease of over 9% after being turned down at the $100,000 mark. Financial experts predict that this decline might extend further, serving as a part of Bitcoin’s rally moderation due to profit-taking by long-term investors.

Bitcoin Price and Global M2 Money Supply Correlation

Historically, the value of Bitcoin tends to align with the growth of the world’s M2 money supply, and this pattern holds true even during periods of correction. As per analysis by well-known expert Joe Consorti, from September 2023 onwards, the fluctuations in Bitcoin’s price have closely mimicked the increases in M2 money supply, with a delay of approximately 70 days.

Recently, Consorti emphasized the reliability of the correlation, pointing out how the price of Bitcoin fell by $5,000 in just one day, mirroring trends observed in global M2 money supply data from the previous week.

The analyst has issued a cautionary note, predicting a possible 20-25% drop in Bitcoin’s value from its latest peak of $99,000 if current trends persist. Yet, Joe Consorti advises staying vigilant as he questions whether Bitcoin will adhere to the global M2 trend and fall further or instead find a level of support and halt its descent.

Currently, the price of Bitcoin is currently decreasing by 1.95%, standing at approximately $92,864. Its market capitalization is now $1.84 trillion, and daily trading volumes have reached an impressive $91.14 billion. Notably, the open interest for Bitcoin has dropped by 4.74% to around $60 billion, while options open interest has increased by 34% to $5.92 billion before this Friday’s expiration. In addition to Bitcoin, other cryptocurrencies are also experiencing declines as the market fervor subsides.

BTC On-Chain Data Signals Weakness

According to the recent Glassnode analysis, there’s been a significant increase in transactions from long-term investors, with the rate of Bitcoin selling reaching approximately 366,000 BTC each month. This is the highest monthly Bitcoin selloff by these investors since April 2024, as reported by the analysts. They further noted:

Starting from September, when the peak in LTH supply was reached, this group has dispersed approximately 507,000 Bitcoins. This is a substantial amount, but it’s smaller compared to the 934,000 Bitcoins spent during the rally leading up to the March 2024 all-time high.

Bitcoin Price May Crash to $88,000 and Below?

As an analyst, I’ve noticed a shift in Bitcoin’s price dynamics as it failed to hold the significant support level at $94,000. Some fellow analysts are now projecting potential further drops, with estimates ranging from $88,000 to even $80,000.

Beyond the worldwide M2 supply, crypto expert Justin Bennett emphasizes important Bitcoin liquidity zones. The most significant pool of BTC liquidity within the last 30 days is situated at approximately $73,000 – a level that coincides with where the Bitcoin price surge towards $100K started. Bennett underlines that as long as Bitcoin trades below $93,600, both $86,000 and $73,000 are crucial price points to monitor closely.

Based on Kalshi’s forecast, the likelihood of Bitcoin reaching $100,000 has decreased from a high of 92% to currently 64%. Furthermore, the probability that Bitcoin will hit $100K by November end has plummeted from 88% to merely 18%, over the past four days. Additionally, MicroStrategy’s stock, the largest corporate Bitcoin holder, has dropped a significant 35% in just four days.

Read More

2024-11-27 10:06