Bitcoin is back in the red at press time, looking to perform on the daily chart. After the unexpected closing of the September bar, the coin started a downward trend in October, falling almost 5% from the resistance area of ​​$65,000 and $66,000.
Will Bitcoin Follow Global M2 Growth To $90,000?
Despite the decline, traders are confident about what’s to come, expecting the coin to turn the corner and print higher. In the post on X, one commenter he predicts Bitcoin will reach $90,000 in the next two months, especially if it continues to follow the global M2 money supply trend.
From the analyst’s findings, the global M2 money supply is directly related to Bitcoin prices. That means that whenever there is a rise in global currency, BTC prices also rise.
Currently, global liquidity is increasing. Therefore, if the previous correlation leads, there is a great chance that the coin will not break above the height of March but also rise to $ 90,000, according to the analyst’s prediction.
Currently, the local resistance lies at the September 2024 highs around $65,000 and $66,000. If the bulls flow back, lifting sentiment and prices, Bitcoin could go higher.
In the short term, strong resistance lies between $70,000 and $72,000. A break above this level could result in a short squeeze that could see the world’s most valuable coin break above the March highs.
China Driving Global Liquidity, Federal Reserve Plans Continued Rate Cuts
While technical considerations may support Bitcoin bulls, analysts are closely monitoring the global M2 money supply. In the post on X, one viewer explains that the global economy is picking up in part due to a weak USD.
As expected, whenever the money supply of Japan, Chinese, or even the European Union increases in USD terms, the value of the greenback tends to decrease, leading to a proportional change in the global M2 money supply.
The growth in global capital in recent weeks, the analyst said, is mainly due to monetary policy changes in China. The PBoC has cut interest rates and plans to inject billions into the economy.
Its M2 currency is larger than that of the United States in USD terms. Subsequently, it is the leader in increasing the M2 money supply globally.
As the United States Federal Reserve steps down after suppressing its M2 money growth from 2022 to curb inflation, Bitcoin and risk assets are likely to benefit.
After cutting rates by 50 basis points in September, Jerome Powell, the chairman of the Federal Reserve, has done it noted that the central bank may cut rates even further in Q4 2024.
Featured image from Canva, chart from TradingView