Bitcoin’s Tight M2 Correlation Returns as Market Braces for Impact
Bitcoin’s price movement has realigned with global M2 money supply trends, suggesting a potential market shift ahead. According to analyst Joe Consorti’s latest research, BTC’s recent drop to $78,000 mirrors M2’s downward trajectory with a 70-day lag, highlighting the cryptocurrency’s continued sensitivity to broader monetary conditions.
Strategic Bitcoin Reserve (SBR) Announcement Creates Market Turbulence
In a surprising turn of events, President Trump’s announcement of the Strategic Bitcoin Reserve triggered an unexpected 8.5% price decline. Executive Order 14233 authorizes the accumulation of Bitcoin through a budget-neutral mechanism, with current holdings at 198,109 BTC.
Technical Signals Point to Potential Bottom
Despite recent volatility, technical indicators suggest a possible local bottom formation. Two hammer candlesticks have appeared on the weekly chart, historically significant patterns that preceded Bitcoin’s surge from $57,000 to $108,000 in summer 2024.
Bitcoin Dominance Rises as Altcoins Struggle
A notable development is Bitcoin’s increasing market dominance, with ETH/BTC ratio falling to 0.0227—its lowest since May 2020. Institutional interest in Ethereum has declined significantly, evidenced by a 56.8% drop in the AUM ratio between Ethereum and Bitcoin.
At press time, Bitcoin trades at $82,875, with market participants closely monitoring the correlation between BTC price action and global M2 trends for potential directional signals.