Bitcoin has faced a decline in early October after a bullish September, dropping nearly 5% from resistance levels of $65,000 to $66,000. Analysts predict a potential rise to $90,000 in the next two months if Bitcoin continues to follow the trend of global M2 money supply, which is currently on the rise due to recent monetary policies, particularly from China. Key resistance levels exist, and a breakout could lead to significant gains for the cryptocurrency.

Bitcoin has experienced a decline following the optimistic closing of its September performance and has begun October on a weaker note, diminishing nearly 5% from its previous heights around $65,000 to $66,000. Despite this downturn, many traders remain hopeful, with some analysts suggesting that Bitcoin may reach $90,000 within the next two months, provided it continues to mirror the upward trend of the global M2 money supply. Analytical observations have shown a consistent correlation between Bitcoin prices and global M2 money supply levels. As global liquidity increases, Bitcoin prices tend to rise accordingly. Currently, there is a notable increase in global liquidity, ideally positioning Bitcoin to potentially surpass its previous highs from March and approach the predicted value of $90,000. In terms of resistance levels, there appears to be a strong local resistance at the September 2024 highs, around $65,000 and $66,000. Should bullish sentiment return and price momentum increase, Bitcoin could experience significant growth. Furthermore, strong resistance is observed between $70,000 and $72,000, and a breakout above this level may trigger a short squeeze, potentially propelling Bitcoin past its March highs. Key factors influencing global liquidity include recent monetary policy shifts in China, particularly the People’s Bank of China (PBoC) reducing interest rates and implementing measures to inject substantial capital into the economy. It is noteworthy that China’s M2 money supply exceeds that of the United States in USD terms, reflecting its dominant role in global M2 money supply expansion. Additionally, the United States Federal Reserve has indicated plans to ease monetary policy further, highlighting a potential favorable environment for Bitcoin and similar risk-on assets. Following a recent 50 basis point cut in September, there are indications that additional decreases in rates may follow in the fourth quarter of 2024.

The recent volatility in Bitcoin’s price movements can be attributed to broader financial trends, particularly in global liquidity and monetary policy. The correlation between Bitcoin prices and the global M2 money supply signifies an important dynamic in forecasting Bitcoin’s potential price trajectories. The M2 money supply, which comprises cash, checking deposits, and easily convertible near money, is an essential indicator of the money available in the economy. Accordingly, increased money supply tends to lead to inflationary pressures and can drive investors towards assets like Bitcoin, which are perceived as hedges against inflation. Moreover, substantial economic maneuvers by countries such as China have historically impacted global financial markets, intensifying the necessity for traders to monitor these developments diligently.

In conclusion, while recent market movements have presented challenges for Bitcoin, the outlook remains positive based on historical correlations with the global M2 money supply. As economic conditions evolve, particularly with changes in monetary policy across major economies like China and the United States, traders may witness significant shifts in Bitcoin’s price trajectories. Analysts remain optimistic, citing a potential rise to $90,000 within a two-month timeframe, contingent on continued increases in global liquidity and effective breakouts from identified resistance levels.

Original Source: bitcoinist.com

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