Has the Bitcoin Surge Ended Following the $111,900 All-Time High? Global M2 Money Supply Continues to Rise
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Market conditions have recently changed, affecting various sectors.
Bitcoin has experienced a notable decline in recent days, dropping below $110,000 after reaching a new peak of $111,900 just four days prior. The price fell as low as $107,500 before a small recovery, leading investors to question the sustainability of the recent surge. However, some analysts maintain that the bullish trend for Bitcoin remains intact. Analyst Colin points to a significant macroeconomic indicator, the Global M2 Money Supply, as a source of enduring optimism.
Global M2 Money Supply Indicates Resilience of Bitcoin Rally
An assessment shared by analyst Colin on social media shows that Bitcoin is closely tracking the global M2 money supply with an 82-day delay. This chart illustrates that the global M2 measure, which represents the total liquidity in the largest economies, has recently achieved a new peak. Historically, Bitcoin has followed this trend, albeit with a slight lag, and Colin interprets this as a signal for potential price increases ahead.
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The correlation between the Global M2 money supply and Bitcoin’s price movements is significant across various timeframes, with a peak correlation of 93% noted over a 1.5-year period. This strong relationship suggests that the recent Bitcoin rally is supported by broader trends in monetary expansion.
Considering this information, one could indicate that Bitcoin is undergoing a healthy correction within a larger upward trend, particularly in relation to the global money supply. The retreat to $107,500 doesn’t undermine the positive outlook, and Bitcoin’s ability to remain above previous consolidation levels between $102,000 and $104,000 is a reassuring sign.
Colin: Market Sentiment Remains Cautious, Yet Data Supports Positive Outlook
Despite reaching the new high of $111,900 and Bitcoin bulls retaining their breakout level as a support point, market sentiment appears to be cautious. This uncertainty was noted by Colin, who points out that many traders still question the durability of the breakout, which he finds ironic given the robust data available.
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Colin also highlighted the CBBI (Crypto Bull Run Index), which currently stands at 79, still well within safe bounds. This suggests that the market is not yet approaching a state of euphoria, indicating that there is substantial growth potential remaining in the current cycle.
Colin’s projections suggest Bitcoin is on a path to move beyond current levels toward $130,000 if the correlation with the M2 money supply holds true. His previous analyses regarding the relationship between the Global M2 supply and Bitcoin have accurately predicted recent price movements. Back in April, when Bitcoin dropped to $74,000, he forecasted that May would herald a significant breakout period for Bitcoin, a prediction that has proven correct.
As of this moment, BTC is trading at $109,670, reflecting a 2% gain over the last 24 hours.
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