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Quick analysis of the situation
Grab your helmets and hold onto your wallets—because Bitcoin is continuing to ride that financial rollercoaster with an inexplicable passion! Lately, the Bitcoin price has been pacing the track like a lion in a cage, swinging between $108,000 and $110,000 with all the enthusiasm of a misplaced penny on a table. For those who enjoy taking the scenic route through the world of cryptocurrencies, buckle up; we’re diving into the nitty-gritty of why our favorite digital currency is displaying its fascinating dance moves.
If you’ve been following the financial gossip, you may have noticed that Bitcoin's price dipped recently but managed to keep its balance—staying comfy in that $108,000 to $110,000 range. It’s like that one friend who tries to be cool but keeps tripping over their own sneakers. But why this tightrope act? Well, according to analyst Kyle Chassé, Bitcoin has an interesting relationship with the global M2 money supply that resembles a rom-com plot twist: there’s a 90-day lag between the two! That means when global liquidity struts its stuff, Bitcoin follows up a few months later, probably planning its entrance at the next crypto party.
Speaking of parties, let’s reminisce about where Bitcoin has been lately. It soared above $109,000 like a rock star on stage back in January, only to tumble down below $75,000 in April—cue dramatic gasps from investors. But hold your horses (and your wallets)! Since that dramatic dip, Bitcoin has sorted out its life choices and is once again edging toward that blissful $110,000 mark. It certainly feels more like a rollercoaster pause than the finale, doesn’t it?
Now let’s talk about the money—because what’s more exhilarating than a healthy dose of financial numbers? At the beginning of 2023, the global M2 stood at about $98 trillion. By early 2024, it hit a whopping $108 trillion. Our dear Bitcoin found itself sulking below $80,000 during this phase. But recently, as M2 surpassed $111 trillion, the trend brings a silver lining: some reports suggest Bitcoin could keep climbing, potentially soaring higher until mid-2025—as long as liquidity sticks around to serenade it, of course.
Chassé has even painted a rather ambitious picture of Bitcoin hitting a jaw-dropping $400,000—yes, you heard that right. That’s a 270% jump from the current price, and that’s without calling upon wizards or mystical powers. Coded to greatness, Chassé suggests that investors keen on liquidity trends should keep their eyes peeled for the big bucks, even if the path to profits is bumpy enough to make your stomach churn.
However, tread carefully, adventurous traders! While the M2 money supply may be the main character in this story, it certainly isn’t the only player. Factors like real interest rates, policy changes, and on-chain signals can stir the pot in ways you didn’t see coming. If central banks decide to get a little hawkish and raise their rates, it could throw a real wet blanket on Bitcoin’s party, dampening the vibes even when M2 is on the rise.
So, what lies ahead in our Bitcoin saga? Analysts suggest that M2 leads Bitcoin by about 12 weeks—so, if you’re looking to predict the future, grab your crystal ball and take note! Should M2 growth slow down, Bitcoin might hold its ground or even take a breather. On the flip side, any fresh wave of liquidity could launch it to dizzying new heights.
At the end of the day, the connection between the money supply and Bitcoin prices serves as a handy (if not slightly unpredictable) compass for traders. While it won’t give you a straightforward buying or selling strategy, understanding that cash growth can flow into Bitcoin after a three-month delay might just help you pull the trigger at the right time—or at least help you look cool to your friends. Here’s to dancing with the volatility—may your ride be wild but profitable!
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Image(s) are provided by Unsplash and/or other free sources. They are illustrative and may not represent the content truly.
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Please, behave!