As Bitcoin (BTC) remains in the low $80,000s, an important macroeconomic trend appears poised to support the leading cryptocurrency. If past behavior is a guide, BTC may be on the brink of another significant price increase.
Could An Increase In M2 Money Supply Favor Bitcoin?
In a recent post on X, crypto analyst Master of Crypto indicated that a resurgence in the global M2 money supply could reignite BTC’s upward momentum. The analyst highlighted that M2, as a leading indicator, often precedes substantial fluctuations in Bitcoin’s price direction.
For those unfamiliar, the M2 money supply represents the total amount of money circulating in an economy, encompassing cash, checking deposits, savings accounts, and other easily accessible assets. It serves as a critical indicator of liquidity, impacting inflation, economic expansion, and financial markets, including emerging assets like Bitcoin.
Master of Crypto observed that historically, movements in M2 tend to forecast BTC’s price trends with a 70-day lag. The analyst elaborated:
Recently, M2 has begun to recover ahead of BTC, and it’s now fully restored, suggesting that BTC might follow suit. Analysts have their theories on why this upcoming BTC surge could surpass all previous ones.
Another analyst, James, corroborated these insights, pointing out that BTC may witness another price surge following a brief dip and consolidation phase.
Crypto analyst The M2 Guy provided additional perspectives, indicating that if the 70-day lag is accurate, BTC’s next rally could initiate around March 24. He noted an alternative scenario, based on a 107-day lag, suggesting April 30 as a potential breakout date.
Technical Analysis Indicates BTC Take-Off
Crypto trader Merlijn The Trader identified a potential breakout from a falling wedge pattern—historically a bullish setup for Bitcoin. On average, BTC has achieved a 66% return after such a breakout on the three-day chart. A similar movement now could propel BTC to reach new all-time highs (ATH).
Additionally, Merlijn mentioned that BTC is following a megaphone pattern. However, he advised that Bitcoin needs to maintain its position above $72,000 for this bullish formation to remain valid.
Crypto specialist Burak Kesmeci highlighted that a rebound in the U.S. stock market may be crucial for Bitcoin’s next increase. He emphasized the strong correlation between cryptocurrencies and traditional stock markets, implying that BTC could face difficulties if equities continue to falter.
Meanwhile, notable American gold advocate Peter Schiff issued a bearish forecast, cautioning that BTC is not out of danger yet—predicting a possible “catastrophic drop” if the NASDAQ enters a bear market. Currently, BTC is trading at $83,826, reflecting a 1.7% decrease over the past 24 hours.
Featured Image from Unsplash.com, charts from X and TradingView.com
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