Bitcoin price movements continue to show a delayed correlation with global M2 money supply trends.
A sharp rise in M2 may indicate a potential bullish phase for Bitcoin in the coming weeks.
Key resistance at $104,896 and support near $103,398 suggest BTC is in a consolidation phase.
A new chart analysis has triggered the debate about Bitcoin's price action and, more so, how it compares to global M2 money supply trends. According to recent statistics, Bitcoin (BTC) currently trades at $104,334, having recorded a humble 0.6% gain in the past 24 hours.
More importantly, the world's supply of M2 money—a gauge of system-wide liquidity—had appeared to predict previous price movements and may now be signaling a trend towards a bullish move for the cryptocurrency once again.
M2 Money Supply and Bitcoin: A Notable Correlation
The chart overlaying Bitcoin's price with the global M2 money supply illustrates a significant relationship between the two indicators. In the visual, Bitcoin’s historical price movements appear to follow M2 changes with a noticeable delay. This pattern held true during the last major correction: M2 began to decline, and shortly after, Bitcoin followed with a downward movement.
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Now, the M2 line has sharply increased once again. Analysts monitoring macroeconomic indicators are interpreting this as a potential signal of renewed upward momentum for Bitcoin. This is based on the idea that increased money supply typically inflated asset prices as excess liquidity seeks returns in both traditional and alternative investments.
Price Levels and Technical Outlook
Currently, Bitcoin is trading at $104,698 and its daily range goes from $104,771 to $103,995. If the value falls, it might stop at $103,398 and if it rises, resistance is likely at $104,896. These levels suggest that BTC is currently consolidating, potentially awaiting a catalyst such as macroeconomic news or further liquidity movement to break out in either direction.
While the current percentage change of +0.05% might seem small, the broader picture suggests that larger moves could be forming if the correlation with M2 holds. Historical patterns imply that such liquidity surges have often preceded more substantial rallies in risk-on assets like cryptocurrencies.
Long-Term Implications of Global Liquidity Trends
What stands out in the data is the persistent rise of global M2 supply, which has reached new highs even as central banks tread cautiously on interest rate policies. For digital asset markets, this continued expansion in money supply could create a favorable environment—provided risk sentiment does not reverse.
Despite the volatile nature of crypto markets, some market watchers argue that understanding macro liquidity cycles, such as M2 trends, offers a more stable lens for forecasting price behavior. If Bitcoin continues to trail M2 with a time delay, then current supply expansion may point to significant future price movements.
Final Thoughts
Bitcoin’s price behavior appears to remain influenced by macro-level financial trends, particularly the global M2 money supply. As liquidity expands, the probability of an upward move increases, provided market conditions remain stable. Traders and analysts alike are watching these indicators closely, noting that while short-term volatility is unavoidable, long-term signals may be aligning in Bitcoin’s favor once again.
