At press time, Bitcoin has returned to the red when looking at performance on the daily chart. After closing the unexpectedly rising bar from September, the coin started on a weaker note in October, falling by almost 5% from the resistance zone at $65,000 and $66,000.
Will Bitcoin follow the global M2 money supply escalate to $90,000?
Despite the decline, investors are confident about what lies ahead, expecting the coin to turn the corner and print higher. In the post on X, one of the analysts predicts Bitcoin will reach $90,000 in the next two months, especially if it continues to follow the global M2 money supply trend.
The analyst’s findings show that the global M2 money supply is directly tied to Bitcoin prices. This means that whenever there is an escalate in the global money supply, BTC prices also escalate.
Currently, global liquidity is increasing. Therefore, if past correlation is leading, there is a high probability that the coin will not only break above the March highs but will also rise to $90,000 as analysts have predicted.
Currently, the local resistance zone is at the September 2024 highs around $65,000 and $66,000. If the bulls pull away, lifting sentiment and prices, Bitcoin could rise.
In the low term, there is sturdy resistance between $70,000 and $72,000. A break above this level could trigger a low squeeze that could push the world’s most valuable coin above its March highs.
As China fuels global liquidity, the Federal Reserve plans to cut interest rates further
While technical considerations may support Bitcoin bulls, analysts are closely monitoring the global M2 money supply. One follower in the post on X explains that global liquidity is increasing in part due to the weakening US dollar.
As expected, whenever the money supply in Japan, China, or even the European Union increases in USD terms, the value of the dollar tends to decline, leading to a revaluation of the global M2 money supply.
The analyst claims that the escalate in global liquidity in recent weeks is primarily due to changes in monetary policy in China. The PBoC has cut interest rates and plans to inject billions to stimulate the economy.
The M2 money supply in this country is greater than in the United States in USD terms. This is therefore the main factor driving the global expansion of the M2 money supply.
With the US Federal Reserve weakening after suppressing M2 money supply growth from 2022 to curb runaway inflation, Bitcoin and risk-bearing assets are likely to benefit.
After cutting interest rates by 50 basis points in September, Jerome Powell, chairman of the Federal Reserve, did so he suggested that the central bank may further reduce interest rates in the fourth quarter of 2024.
Feature image from Canva, chart from TradingView
