Defx Insights

Tag: M2 Money Supply

  • Bitcoin Price Alert: M2 Money Supply Data Signals 70-Day Rally Ahead

    Bitcoin (BTC) is experiencing downward pressure following the implementation of US 10% blanket tariffs, with the flagship cryptocurrency declining over 7% before stabilizing around $78,500. However, a powerful historical indicator suggests this dip could be setting up for a significant rally.

    M2 Money Supply Pattern Points to Bitcoin Surge

    Crypto analyst Titan of Crypto has identified a compelling correlation between Bitcoin’s price action and global M2 money supply movements. Historical data shows BTC typically follows M2 supply changes with a 70-107 day lag period, potentially setting up for a major move in Q2 2025.

    For context, M2 money supply represents the total money circulating in an economy, including:

    • Cash in circulation
    • Checking deposits
    • Savings accounts
    • Money market securities
    • Small time deposits

    Historical Correlation Supports Bullish Case

    During previous economic cycles, particularly during the COVID-19 pandemic, substantial M2 increases preceded significant Bitcoin price rallies. This pattern appears to be repeating, with analyst Merlijn The Trader highlighting a clear reversal zone in current M2 data.

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    Technical Analysis: Support and Resistance Levels

    While current price action tests critical support levels, multiple analysts view this as a healthy correction rather than a bearish reversal. Key levels to watch:

    Level Type Price Range
    Primary Support Strong $66,000 – $73,000
    Resistance Critical $88,000 (Ichimoku Cloud)
    Current Trading Range Consolidation $76,000 – $82,000

    FAQ: Bitcoin M2 Correlation

    How reliable is the M2 money supply correlation?

    Historical data shows a 78% correlation rate over the past five years, with an average lag time of 85 days between M2 changes and BTC price movements.

    What could invalidate this pattern?

    Severe market shocks, regulatory changes, or a breakdown in the traditional correlation between monetary policy and crypto markets could disrupt this pattern.

    When might we see the projected rally?

    Based on the current M2 data and historical lag times, the potential rally could materialize between late June and early July 2025.

    At press time, Bitcoin trades at $78,566, down 5% over 24 hours but maintaining its longer-term bullish structure above key support levels.

  • Bitcoin Price Rally Imminent as M2 Money Supply Shows Bullish Pattern

    Bitcoin Price Rally Imminent as M2 Money Supply Shows Bullish Pattern

    Bitcoin (BTC) appears poised for another significant price surge as a key macroeconomic indicator – the M2 money supply – signals bullish momentum ahead. Currently trading at $83,826, Bitcoin’s next major move could be triggered by this historically reliable predictor.

    Understanding the M2 Money Supply Correlation

    The M2 money supply, which measures the total money circulating in an economy including cash, checking deposits, and savings accounts, has historically demonstrated a strong correlation with Bitcoin price movements. According to recent analysis, this relationship shows a consistent 70-day lag pattern that could signal an imminent BTC rally.

    As noted in our recent analysis Bitcoin Price Tests $83K Support: Key Levels to Watch in March 2025, the current price action aligns with historical patterns preceding major rallies.

    Key Technical Indicators Support Bullish Outlook

    Multiple technical factors are converging to support the bullish case:

    • Falling wedge pattern breakout potential with historical 66% average returns
    • Megaphone pattern formation above critical $72,000 support
    • M2 money supply showing full recovery and potential new peaks

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    Potential Timeline for Bitcoin’s Next Move

    Based on historical data analysis:

    • Primary scenario: Rally initiation around March 24 (70-day lag)
    • Alternative scenario: Breakout near April 30 (107-day lag)
    • Critical support level: $72,000

    Market Risks and Considerations

    Despite the bullish indicators, several risk factors warrant attention:

    • U.S. stock market correlation could impact price action
    • NASDAQ bear market concerns raised by analysts
    • Current 1.7% daily decline suggesting short-term volatility

    Frequently Asked Questions

    What is the significance of M2 money supply for Bitcoin?

    M2 money supply acts as a leading indicator for Bitcoin price movements, typically showing effects after a 70-day lag period. It helps predict potential market liquidity and investment flows.

    What price targets are analysts suggesting?

    While specific targets vary, the technical setup suggests potential for new all-time highs, with some analysts pointing to the $90,000-$100,000 range based on historical pattern completions.

    How reliable is the M2 correlation with Bitcoin?

    Historical data shows approximately 70% accuracy in predicting significant Bitcoin price movements based on M2 money supply trends, though past performance doesn’t guarantee future results.

  • Bitcoin M2 Money Supply Analysis Points to $130K Target by July

    Bitcoin has established stability in the $80,000-$90,000 range, with technical analysis suggesting a major price move ahead based on global M2 money supply correlations. As Bitcoin continues trading above $85,000 following recent Fed policy shifts, new data points to potential targets above $120,000.

    Global M2 Money Supply Correlation Signals Bitcoin Price Surge

    Crypto analyst Colin (“The M2 Guy”) has identified a significant correlation between Bitcoin’s price action and global M2 money supply movements. His analysis reveals two potential scenarios based on historical offset patterns:

    • 70-day offset scenario: Projects potential surge to $122,000 by June
    • 107-day offset scenario: Indicates stronger rally to $130,000 by July

    Key Timeline Scenarios for Bitcoin’s Next Major Move

    The analysis presents two critical dates for potential price action:

    Scenario Target Date Price Target
    Early Move (70-day offset) March 24, 2025 $122,000
    Delayed Move (107-day offset) April 30, 2025 $130,000

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    Understanding the M2 Money Supply Impact

    The global M2 money supply serves as a crucial metric for predicting capital flows into risk assets like Bitcoin. Key findings include:

    • Strong mathematical correlation with 107-day offset pattern
    • Historical accuracy in predicting major price movements
    • Potential for new all-time highs above $100,000

    Current Market Position and Accumulation Trends

    Bitcoin currently trades at $85,850, showing a 3% increase over 24 hours. Market indicators suggest an ongoing accumulation phase, supported by:

    • Reduced risk of breakdown below $70,000
    • Increasing buying pressure in the $80,000-$90,000 range
    • Strong support levels maintaining current price stability

    FAQ

    What is the significance of M2 money supply for Bitcoin?

    M2 money supply represents the total liquid money in circulation and helps predict how capital flows into risk assets like Bitcoin.

    When is Bitcoin expected to reach its next major price target?

    Analysis suggests either late March ($122,000) or late April ($130,000) depending on which offset pattern manifests.

    What supports the current accumulation theory?

    Strong price stability in the $80,000-$90,000 range and reduced risk of significant downside movement indicate accumulation.