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Introduction to the M2 Money Supply Connection
Investors are currently navigating a volatile Bitcoin market, facing increased uncertainty amid analyst predictions of a potential 20-25% decline in the global M2 money supply. This trend has been a focal point for market researchers who are diligently examining the intricate relationship between Bitcoin prices and the global M2 money circulation.
Crypto analyst Joe Consorti has highlighted an intriguing pattern: Bitcoin prices have consistently followed M2 pricing with a 70-day delay since September 2023. This observation has led to speculation that Bitcoin may soon experience a significant correction, aligning with the downward trajectory of the M2 money supply.
Recent data suggests that Bitcoin’s price might fall to critical support levels of $88,000 or even $80,000 if the current trends persist. As of the latest updates, Bitcoin’s value is $5,000 lower than it was a day prior, closely mirroring the earlier movements of the global M2 money supply.
Bitcoin has been struggling to maintain its position above $94,000, and analysts are closely monitoring these liquidity zones. The discomfort among investors has grown, as the probability of Bitcoin reaching $100,000 by the end of the year has significantly decreased from 92% to 64%.
Long-Term Holders’ Pressure to Sell
According to the latest Glassnode data, long-term holders (LTHs) have intensified their selling activities, with over 507,000 BTC distributed since September 2023. This increased selling pressure suggests that many investors are opting to liquidate their profits amidst the current market volatility.
Bitcoin is trading at $95,454, raising concerns about a potential shift in market sentiment. The heightened activity among LTHs may further contribute to the downward pressure on Bitcoin’s price. Additionally, the Realized Profit/Loss (P/L) ratio has reached unprecedented highs, indicating a market that is potentially overheated. Analysts warn that the current trend of profit-taking and decreasing liquidity might dampen Bitcoin’s upward momentum.
Bitcoin Future Outlook – What Is In Store?
The future of Bitcoin remains uncertain as it navigates these challenges. While some market observers believe that Bitcoin’s price may stabilize at lower levels, others caution that further corrections could be necessary if global liquidity continues to dwindle. Investors are advised to remain vigilant and consider the potential implications of these factors on Bitcoin’s future trajectory.
As the market evolves, it is crucial for investors to stay informed and adaptable in their strategies. The dynamic nature of cryptocurrency investments requires a keen understanding of market trends and external influences such as the global M2 money supply.
