Analysis of BTC/USDT Long-Term Move with M2 Money Supply and BTC Dominance
1. M2 Money Supply & Bitcoin
Relationship:
· M2 Expansion: When central banks (especially the U.S. Federal Reserve) increase M2 (cash + savings deposits + money market securities), excess liquidity often flows into risk assets like Bitcoin. Historically, Bitcoin rallies during periods of aggressive M2 growth (e.g., 2020–2021 post-COVID stimulus).
· M2 Contraction: Tighter money supply (e.g., 2022–2023 Fed QT) typically pressures BTC, as seen in the 2022 bear market.
Current M2 Trend (as of 2025):
· U.S. M2 has stabilized after 2023’s contraction but shows modest YoY growth (≈2–3%).
· Key Insight: Sustained M2 growth is needed for a major BTC bull run. Recent Fed signal#MyTradingStyle #MyTradingStyle s of potential rate cuts (2024–2025) could reignite liquidity inflows into crypto.
2. BTC Dominance
What It Means:
· Rising Dominance: Indicates capital rotating into Bitcoin from altcoins (often during risk-off periods or BTC-led bull runs).
· Falling Dominance: Suggests "altcoin season," where capital chases higher-risk alts.
Current Trend:
· BTC Dominance has hovered ≈52–55% in 2024–2025, reflecting:
· Institutional BTC demand (ETFs, spot markets).
· Relative caution in altcoin markets.
· Long-Term Signal: Dominance above 50% supports BTC as the "blue-chip" crypto asset. A breakout above 60% could signal accelerated BTC accumulation.
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Charts
1. U.S. M2 Money Supply (2019–2025)
https://fred.stlouisfed.org/graph/fredgraph.png?g=19iL
· Key Observations:
· Sharp spike (2020–2022): M2 surged 40% during COVID stimulus.
· 2023 contraction: Fed QT reduced M2 by 4% (bearish for BTC).
· 2024–2025: Gradual recovery (neutral/mildly bullish).
2. BTC Dominance Chart (2017–2025)
https://www.tradingview.com/x/u1fzY7fD/
· Key Observations:
· 2017–2018: Dominance crashed from 95% to 38% (altcoin mania).
· 2020–2021: Rallied to 73% (BTC-led bull run).
· 2023–2025: Consolidation at 50–55% (institutional BTC focus).
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BTC/USDT Long-Term Outlook
✅ Bullish Catalysts:
· M2 Expansion: Fed rate cuts (expected late 2024–2025) could boost liquidity, lifting BTC.
· BTC Dominance Strength: Sustained >50% dominance confirms BTC as a "safe haven" within crypto.
· Halving (April 2024): Post-halving supply squeeze historically triggers bull runs 12–18 months later (peaking late 2025).
⚠️ Risks:
· M2 Stagnation: If inflation resurges, forcing prolonged Fed tightening, BTC faces headwinds.
· Regulatory Shocks: U.S./global crypto regulations could impact dominance.
Price Projection:
· Base Case (2025–2026):
· $100,000–$150,000 if M2 grows 5%+ YoY and dominance holds >50%.
· Bear Case:
· $40,000–$60,000 if M2 flatlines and altcoins siphon capital (dominance <45%).
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Strategic Recommendation:
1. Go Long on Dips: Accumulate BTC below $60,000, targeting $100K+ by 2026.
2. Monitor M2 & Fed Policy: Rate cuts = green light for BTC.
3. Watch Dominance: A surge above 60% = accelerated BTC outperformance.
Key Tools:
· Track M2: FRED M2 Chart
· Track Dominance: TradingView BTC.D
Disclaimer: This analysis is for informational purposes only. Crypto markets are volatile—conduct your own research.
