As a seasoned analyst with over two decades of experience in global finance and cryptocurrencies, I have witnessed the dynamic interplay between traditional markets and digital assets like Bitcoin. The current situation presents an interesting perspective, given the correlation between Bitcoin prices and the global M2 money supply.
Currently, Bitcoin has turned red at the present moment, as indicated by its daily performance chart. Following an unanticipated bullish surge in September that closed, Bitcoin began October on a less favorable note, experiencing a decline of approximately 5% from the $65,000 and $66,000 resistance area.
Will Bitcoin Follow Global M2 Money Supply Growth To $90,000?
Regardless of the current shortened state, traders remain optimistic about the future, anticipating that the coin will soon reverse course and climb higher. In a recent post on X, an analyst forecasts that Bitcoin could reach $90,000 within the next two months, especially if it maintains its correlation with the global M2 money supply trend.
According to the analyst’s results, increases in the worldwide M2 money supply tend to coincide with rising Bitcoin prices. In other words, when the global money supply goes up, so does the value of Bitcoin.
At present, worldwide liquidity is increasing significantly, suggesting that if historical trends hold true, there’s a strong likelihood that the price of the coin could surge past its previous highs in March and potentially reach as high as $90,000, according to the analyst’s forecast.
Currently, the Bitcoin resistance area is situated approximately at levels reached in September 2024, around $65,000 and $66,000. If positive momentum returns, driving optimism and price increases, Bitcoin could potentially reach new heights.
For now, there’s considerable opposition around the range of $70,000 to $72,000. If it manages to surpass this barrier, it might trigger a situation known as a short squeeze, potentially pushing the world’s most valuable coin beyond its March highs.
China Driving Global Liquidity, Federal Reserve Plans To Further Drop Rates
While technical considerations may support Bitcoin bulls, analysts closely monitor the global M2 money supply. In a post on X, one observer explains that global liquidity is rising partly because of the weakening USD.
Just as anticipated, when the money supply of Japan, China, or the European Union grows in U.S. dollars, the value of the US dollar typically decreases. This shift in value is often reflected in a change in the global M2 money supply’s valuation.
According to the analyst, the surge of global funds availability over the past few weeks can largely be attributed to modifications in China’s monetary policies. Specifically, the People’s Bank of China has lowered interest rates and plans to pump billions into the economy to boost it.
1) The country’s M2 money supply exceeds that of the U.S. when converted to US dollars. This makes it the major factor fueling growth in global M2 money supply.
As the U.S. Federal Reserve relaxes its policies following years of limiting the expansion of its M2 money supply (from 2022) to control excessive inflation, it’s expected that Bitcoin and other high-risk investments could experience growth or increased value.
In the realm of cryptocurrencies, I’ve been closely watching the financial landscape, and it seems that Chairman Jerome Powell of the Federal Reserve has subtly suggested potential further rate reductions by the central bank towards the end of 2024, amounting to a 50 basis point decrease in September as a prelude.
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2024-10-02 10:11