Bitcoin appears to have established stability within the $80,000 bracket after fluctuating between $80,000 and $90,000 over the past week. This minimizes the chance of a drop below $70,000, and the potential for another strong rally beyond $90,000 is now emerging.
Crypto analyst Colin, known as “The M2 Guy,” highlighted a notable correlation between Bitcoin and the global M2 money supply. His recent analysis, shared on the social media platform X, suggests that an approaching liquidity influx could propel BTC into a significant price movement in two distinct scenarios.
M2 Money Supply and Bitcoin’s Liquidity-Driven Surge
Technical analysis indicates that Bitcoin’s price movement in relation to the global money supply foresees a major shift in the months ahead. This perspective, pointed out by analyst Colin, revolves around the timing of liquidity transitions within global markets and BTC. His findings present two potential scenarios derived from historical trends of money supply growth and Bitcoin’s price reactions, both suggesting a significant price shift around late March or late April.
The global M2 money supply, indicating the overall amount of liquid funds circulating in the economy, is a strong predictor of how capital flows into risk assets such as BTC. Colin’s analysis notably examines Bitcoin’s price offset against the Global M2 money supply, especially with the 70-day and 107-day offsets.
Bitcoin’s price can be evaluated with various offsets relative to the Global M2 money supply, but the analysis shows these two offsets exhibit the strongest correlation with BTC’s price across different timeframes. Notably, the mathematical correlation is more pronounced with the 107-day offset.
Colin’s analysis therefore lays out two main scenarios based on these offsets. In the first, BTC could see an early increase around March 24, coinciding with the 70-day offset. The second scenario proposes that if the liquidity shift adheres to the more historically reliable 107-day offset, the significant move would occur around April 30.
BTC’s Forecasted Price Targets
Regardless of which scenario unfolds, the anticipation of liquidity flowing into Bitcoin remains consistent. This influx of liquidity into BTC could serve as the crucial catalyst to elevate the asset back above the $100,000 mark and possibly toward new all-time highs.
While Colin’s analysis doesn’t specify an exact price target, projections concerning the global M2 money supply indicate a likelihood of surpassing $120,000 in each scenario. The 70-day offset suggests a target for Bitcoin around $122,000 before June. In contrast, the second scenario, aligned with the 107-day offset, hints at a slightly delayed but potentially more robust rally, forecasting BTC to reach approximately $130,000 by July.
As of writing, Bitcoin is trading at $85,850, reflecting a 3% increase over the last 24 hours. Current buying trends indicate that Bitcoin is now situated in an accumulation phase.
Featured image from Unsplash, chart from Tradingview.com
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