M2 & Crypto: The Hidden Liquidity Signal Every Trader Should Watch

Ever wonder why Bitcoin pumps hard during some years and dumps in others? One clue lies in M2—a measure of how much money is flowing in the economy.

Here’s the breakdown:

M2 = Cash + Checking + Savings + Money Market Funds

When M2 increases, there’s more money available → People invest more → Crypto goes up

When M2 shrinks, liquidity dries up → Risk assets like crypto drop

Think of M2 as the fuel behind big crypto trends. In 2020–2021, M2 soared due to global stimulus → $BTC hit $69K. But when the Fed started tightening in 2022 → liquidity dropped → crypto sold off.

Binance Strategy:

Watch M2 like a macro cheat code. When it’s rising, position long. When it’s contracting, play defense.

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