In recent weeks, Bitcoin has faced significant selling pressure, causing concern among investors. However, there’s still hope on the horizon.
The M2 money supply, a key economic indicator, has turned positive for the first time since November 2022. This shift is sparking optimism among bitcoin traders and investors, suggesting a potential turnaround for bitcoin’s fortunes.
Is Bitcoin Ready for a Comeback? M2 Money Supply Suggests So 3
Positive Turn in M2 Money Supply
The M2 money supply measures the total amount of money circulating in an economy, including cash and various deposits. After months of stagnation, the year-over-year M2 money supply has finally flipped positive.
This change signals an increase in circulating money, typically indicating a shift in investor sentiment towards assets like Bitcoin.
According to Glassnode, a digital assets analysis firm, there has been a notable uptick in Bitcoin outflows throughout April, indicating consistent selling pressure. However, with the positive turn in M2 money supply, this trend could soon reverse.
Data suggests a consistent sell-side pressure — Glassnode
Expert Insights
Prominent figures in the Bitcoin market have weighed in on the significance of this development.
Former BitMEX CEO, Arthur Hayes, believes that Bitcoin may have hit a local bottom and anticipates a gradual recovery. He predicts that bitcoin could rally above $60,000 and trade within a range of $60,000 to $70,000 until August.
Jeff Ross, Vailshire Capital’s CEO, endorsed Bitcoin optimism on X, acknowledging the enduring bullish market sentiments.
Additionally, Oliver L. Velez, a professional trader, sees the positive M2 money supply as a bullish sign for bitcoin. He advises investors to “buckle up” and view any dips as buying opportunities.
He said:
“All I can say is, “buckle-up” and stack harder. Any and all dips are buyable. Consider them gifts and ignore the bozos calling for doom. We are nowhere near the end of Bitcoin’s bull run.”
Historical Performance
Historically, Bitcoin market has tended to outperform traditional financial markets during periods of increasing M2 supply. This correlation suggests that the recent positive turn in M2 money supply could pave the way for a new rise in bitcoin in the coming months.
Speculation and Predictions
The positive change in M2 money supply has sparked speculation among traders regarding bitcoin’s price trajectory. With the supply previously in negative territory since November 2022, the recent flip to positive has fueled optimism.
Traders like Oliver L. Velez and analysis account InvestAnswers are bullish on bitcoin’s future, urging investors to capitalize on buying opportunities presented by any downturns.
InvestAnswers stated: “M2 money supply set to explode! Bitcoin..And here…we…go.”
Raoul Pal, CEO of Global Macro Investor stated in October 2023, just before the start of the bull market:
“It (Bitcoin) really loves Global M2… this is when BTC outperforms the NDX and crypto becomes the Super Massive Black Hole…”
Cautious Optimism
While the positive turn in M2 money supply offers hope for bitcoin’s recovery, caution is advised. It’s essential to recognize that various factors beyond M2 supply influence bitcoin’s price, including regulatory developments and institutional adoption.
Therefore, investors should maintain a cautious approach and conduct thorough research before making investment decisions.
Conclusion
In conclusion, the recent positive turn in the M2 money supply has injected optimism into the Bitcoin market, particularly regarding bitcoin’s price prospects.
While challenges remain, such as regulatory uncertainties and market volatility, the overall sentiment points towards a potential recovery for bitcoin in the coming months. As always, investors should stay informed and vigilant, but the signs are promising for those hopeful for a bitcoin comeback.