Expansion of M2 Money Supply Indicates Potential Extension of Bitcoin Bull Market

CoinJ.com Report:
The historical cycles of the Bitcoin market are closely related to M2 money supply and expanding liquidity.
On October 22nd, market analyst Michaël van de Poppe delved into data points and correlations between cyclical peaks and currency supply. He pointed out that in 2017, M2 supply continued to expand significantly, and this cycle lasted until the end of the year, with BTC reaching a peak of $20,000.
During the bull market of 2021, M2 supply surged, followed closely by the cryptocurrency market, reaching a peak in November of that year. However, currency supply continued to expand into 2022, but due to interest rate hikes and the collapse of several well-known cryptocurrency companies, the market remained in a downturn throughout the year.
Currency supply impact
Analysts predict that if M2 money supply continues to expand for another year and a half, “overall, if M2 supply expands until mid-2026, liquidity expansion may prolong the cycle.”
This chart shows some super important data points that I think are relevant to this cycle.
– In 2016-2017, M2 supply continued to expand significantly, and this cycle lasted until the end of 2017.
– In 2021, M2 supply was basically vertical, and then…
pic.twitter.com/z1QuikfbVG
– Michaël van de Poppe (@CryptoMichNL)
October 22, 2024
M2 money supply is an indicator of the quantity of money in circulation. It includes M1 money, which is physical cash and deposits, as well as “less liquid” money.
Currently, the growth rate of M2 money supply is 2.59%, just surpassing the US inflation rate of 2.44%. Furthermore, this number has been growing since the beginning of this year and is currently at $21.2 trillion, according to the Federal Reserve Bank of St. Louis.
Market strategist Charlie Bilello commented on the growth rate, saying, “After a brief pause, the printing press is back.”
US money supply grew by 2.6% last year, the largest year-on-year increase since August 2022. After a brief pause, the printing press is back.
https://t.co/l5IYmkeySJ
pic.twitter.com/j9YdcpX2A0
– Charlie Bilello (@charliebilello)
October 23, 2024
On October 23rd, Quinten Francois, co-founder of WeRate, shared a chart showing M2 growth and exclaimed, “The currency printing tsunami is coming, pushing Bitcoin into six digits.”
What’s next in the short term?
BTC has dropped about 3% from its multi-month high of $69,500 on October 21st, trading around $67,000, with support holding during Wednesday’s Asian trading session.
Will Clemente, co-founder of Reflexivity Research, observed that Bitcoin is “turning last month’s highs into demand,” indicating that it may be forming a new support base for further upward movement.
I rarely post about low timeframe TA/price action, but it looks like BTC is turning last month’s highs into demand.
pic.twitter.com/cyU1RweWx6
– Will (@WCelementIII)
October 22, 2024
Meanwhile, “The Big Dipper of Crypto Trading” told his 389,000 X fans that he suspects new all-time highs will occur before the US election on November 5th, “unless Trump’s chances of winning increase significantly and ETF inflows continue to rise,” and added, “Before the election, the situation will still fluctuate relative to $65,000 to $70,000.”