Key Points
- Bitcoin’s potential surge is anticipated as global M2 money supply increases.
- Strong on-chain metrics and historical trends favor Bitcoin’s potential uptrend.
Bitcoin [BTC], the top cryptocurrency, is currently in a state of uncertainty among various market participants. This is particularly true as the market anticipates improved conditions in the final quarter.
Bitcoin and Global M2 Money Supply
Historically, a surge in Bitcoin has been observed whenever the global M2 money supply has increased. Now that the global M2 has turned positive, a potential bull run is anticipated. This would be similar to the ones observed in late October 2023 and early January 2024, during which Bitcoin reached new all-time highs.
At the time of writing, BTC/USDT appears to be correcting in a bullish flag pattern. Another surge in Bitcoin could be on the horizon, with the expected Federal Reserve rate cut being a key factor.
Bitcoin’s Trading Range
Currently, Bitcoin is trading near the middle of its price range within a descending trend channel. A breakout to the upside could lead to a push towards the top of the channel and a potential breakout. The lower boundary is at $51k, while the upper resistance is at $66k.
Despite the consolidation, Bitcoin’s strength remains evident, especially as the bears have been unable to break the lower trendline. If Bitcoin breaks the upper trendline and stays above it, Bitcoin’s price could see a significant rally, potentially pushing it to new highs.
Market Sentiment and Accumulation
The MVRV z-score, an indicator of market sentiment, suggests that Bitcoin has been gradually declining while the network’s average on-chain cost basis has increased. This indicates low unrealized profits in the market, leaving more room for upward movement.
Furthermore, the number of Bitcoin addresses holding at least 0.1 BTC is nearing a new all-time high. This suggests that long-term holders, often referred to as “strong hands,” are accumulating Bitcoin, supporting the case for higher Bitcoin prices.
Bitcoin’s short-term holder net position change indicates that many recent buyers are now leaving. This is often a sign of market capitulation, signaling a potential bottom. When short-term holders capitulate, it often precedes a Bitcoin price surge.
In light of strong on-chain metrics and historical trends favoring an uptrend, Bitcoin’s price is poised for potential growth. This could be realized if global market conditions improve and the Federal Reserve implements a rate cut.
