Bitcoin Price Forecast: Potential 20% Decline Prompted by M2 Supply Concerns
Investors are expressing concerns regarding Bitcoin’s recent price slides, with predictions of a significant 20-25% decline potentially linked to a drop in global M2 money supply. Currently valued at $92,864, Bitcoin has experienced notable profit-taking, driven by long-term holders selling significant amounts of BTC. Analysts continue to observe market behaviors indicating an uncertain future for Bitcoin as it navigates these financial challenges, with reduced chances of reaching the $100,000 price point by year-end.
Investors are currently wary of Bitcoin’s recent price fluctuations, particularly as analysts speculate a potential 20% decline connected to the ongoing reductions in the global M2 money supply. Bitcoin, priced at approximately $92,864, has already experienced a decline of nearly 9% from its peak of just under $100,000, largely due to profit-taking activities by long-term holders who divested approximately 366,000 BTC over the past month—the highest volume since April 2024.
Market analysts have increasingly scrutinized the correlation between Bitcoin prices and the flow of money represented by global M2 statistics. Joe Consorti, a notable cryptocurrency analyst, highlighted that Bitcoin has exhibited a 70-day lag in following the trends of global M2 since September 2023. This correlation suggests that if the M2 supply continues its downward trajectory, Bitcoin prices might also experience significant declines, potentially reaching critical support levels around $88,000 or possibly $80,000. “Bitcoin has tracked global M2 with a ~70-day lag since September 2023. I don’t want to alarm anyone, but if it continues, bitcoin could be in for a 20-25% correction.” – Joe Consorti.
Recent data from Glassnode indicates that long-term holders are increasingly liquidating their positions, with over 507,000 BTC sold since September 2023. This shift in behavior underscores a significant selling pressure within the market, further compounding worries about Bitcoin’s future stability, particularly as the likelihood of Bitcoin recapturing the $100,000 mark by year’s end has decreased from 92% to 64%. Moreover, the Realized Profit/Loss (P/L) ratio has reached an unprecedented high, suggesting that many investors are currently benefiting from prior price increases and portending a potential market correction.
Looking ahead, the trajectory for Bitcoin appears uncertain. Although some market observers predict that Bitcoin may stabilize at lower levels, numerous analysts caution that further downward corrections could be necessary if the trend of decreasing liquidity globally persists. Overall, investors should maintain a vigilant outlook as Bitcoin navigates through these challenging economic conditions.
The discussion of Bitcoin’s price movements is intricately tied to broader economic indicators, particularly the M2 money supply, which refers to the total amount of money in circulation or in easily accessible accounts. Fluctuations in the M2 supply can have significant implications on investor behavior and market liquidity, impacting the price of Bitcoin and other cryptocurrencies. Recent data reflecting long-term holders’ selling activity indicates a notable strain on the market, raising concerns over the stability of Bitcoin’s value amid a volatile economic climate.
In summary, Bitcoin is experiencing notable price volatility, exacerbated by the reduction in global M2 money supply and increased profit-taking from long-term holders. As Bitcoin’s value continues to be influenced by these economic indicators, the potential for it to reach $100,000 remains uncertain, and market analysts predict possible significant corrections ahead. Investors are advised to approach this evolving situation with caution, given the historical correlation between Bitcoin prices and global liquidity trends.
Original Source: www.tradingview.com
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