Bitcoin To $90,000 In 2 Months If It Mirrors This Trend?
As of the latest update, Bitcoin has dipped into the red, reflecting a downturn in its daily chart performance. The cryptocurrency started October on a weaker note after closing an unexpectedly bullish September. Bitcoin has dropped nearly 5% from the resistance zone of $65,000 to $66,000.
Will Bitcoin Follow Global M2 Money Supply Growth To $90,000?
Despite this contraction, traders remain optimistic about Bitcoin’s future prospects. Analysts project that Bitcoin could turn the corner and reach higher valuations. One analyst, in a post on X, confidently predicts that Bitcoin will hit $90,000 within the next two months if it continues to follow the global M2 money supply trend.
The analyst’s research indicates a direct correlation between the global M2 money supply and Bitcoin prices. Historically, an increase in global money supply has led to higher Bitcoin prices. With global liquidity on the rise, there is a strong possibility that Bitcoin will not only surpass its March highs but also soar to $90,000, according to the analyst’s predictions.
Currently, the local resistance zone is marked by the September 2024 highs around $65,000 to $66,000. If bullish sentiment returns and prices rise, Bitcoin could experience a significant uptick. In the short term, a strong resistance level exists between $70,000 and $72,000. Breaking through this level could trigger a short squeeze, potentially pushing Bitcoin above its March highs.
China Driving Global Liquidity, Federal Reserve Plans To Further Drop Rates
While technical factors could support Bitcoin’s bullish momentum, analysts are also closely monitoring the global M2 money supply. One observer on X notes that global liquidity is increasing, partly due to a weakening USD. When the money supply in major economies like Japan, China, or the European Union increases in USD terms, the value of the greenback typically declines, resulting in a change in the global M2 money supply.
According to the analyst, the recent uptick in global liquidity is primarily driven by monetary policy changes in China. The People’s Bank of China (PBoC) has cut interest rates and plans to inject billions to stimulate the economy. In USD terms, China’s M2 money supply is larger than that of the United States, making it the primary driver of global M2 money supply expansion.
With the United States Federal Reserve easing its policy after suppressing the growth of its M2 money supply from 2022 to curb inflation, Bitcoin and other risk-on assets are likely to benefit. After reducing rates by 50 basis points in September, Federal Reserve Chair Jerome Powell hinted that the central bank might implement further rate cuts in Q4 2024.
In conclusion, while Bitcoin has seen a recent downturn, the overall outlook remains positive, especially if global liquidity trends continue. Traders and analysts alike are keeping a close eye on these factors, hoping for a significant bullish run in the near future.