Exploring Bitcoin’s Parallels with Gold and the Global M2 Money Supply
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Bitcoin’s Price Trends: A Mirror of Gold and M2 Money Supply
Bitcoin (BTC) is increasingly reflecting the historical price trends of gold and the trajectory of the global M2 money supply. This emerging pattern has led crypto analysts to predict a significant potential rally for the world’s premier cryptocurrency.
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Bitcoin’s Link With Gold and M2 Money Supply
Crypto analyst Jelle recently shared a revealing chart on platform X, highlighting a pattern where gold tends to precede Bitcoin in price movements, with BTC subsequently aligning with gold’s trajectory. This pattern strengthens the perception of Bitcoin as “digital gold.”
Historically, Bitcoin’s price behavior has often mirrored that of gold, influenced by similar macroeconomic forces such as inflation, expansive monetary policies, and a growing investor appetite for scarce assets. With gold prices rising amidst increasing global liquidity and geopolitical tensions, Bitcoin seems to be following this upward trend.
Bitcoin’s growing reputation as a store of value is gaining traction among institutional investors. Robert Mitchnick, the Head of Digital Assets at BlackRock, recently described BTC as a “superior alternative” to gold, signaling strong institutional endorsement.
Furthermore, analyst CryptoGoos has noted Bitcoin’s tendency to follow changes in the global M2 money supply with a lag of approximately two months. This observation suggests that Bitcoin could be on the brink of another rally. The global M2 money supply encompasses all money circulating within the economy, such as cash, checking deposits, and comparable financial instruments. An uptick in M2 often indicates monetary expansion, potentially leading to inflation and driving investors towards gold and Bitcoin as protective hedges.
Technical Indicators and Market Sentiment
From a technical standpoint, Bitcoin is displaying promising signs. Analyst Titan of Crypto highlighted a golden cross formation on Bitcoin’s four-hour chart, which occurs when a short-term moving average, typically the 50-day moving average, crosses above a long-term average, such as the 200-day moving average. This golden cross is widely recognized as a bullish signal, hinting at potential price increases.
The Prospect of New All-Time Highs vs. Support Level Risks
Multiple indicators suggest that Bitcoin’s rally still has room to grow. For example, Titan of Crypto recently pointed out Bitcoin’s alignment with the Golden Ratio Multiplier, which aims for a target price of $130,000. Similarly, crypto aficionado KillaXBT forecasts a BTC price of $120,000 by mid-June. Nonetheless, certain risks need to be considered to avoid a potential price downturn.
Analysts warn that if Bitcoin dips below the crucial support range of $97,000 to $99,000, it could lead to a sharper market correction. As of the latest update, Bitcoin is trading at $106,610, marking a 2.2% increase over the past 24 hours.
BTC currently trades at $106,610 according to TradingView.com.
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