Coin World Report:
The historical Bitcoin market cycle is closely related to the M2 money supply and expanding liquidity. On October 22, market analyst Michaël van de Poppe conducted a thorough study of data points and correlations between cyclical peaks and currency supply. He pointed out that in 2017, the 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 in 2021, the M2 supply surged, followed closely by the cryptocurrency market, reaching its peak in November of that year. However, the 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 slump throughout the year.
Currency supply impact
Analysts predict that if the M2 money supply continues to expand for another year and a half, liquidity expansion may prolong the cycle. “Overall, if the M2 supply expands until mid-2026, liquidity expansion may extend the cycle.”
This chart shows some super important data points that I think are important for this cycle.
– In 2016-2017, the M2 supply continued to expand significantly, and this cycle lasted until the end of 2017.
– In 2021, the M2 supply was basically vertical, and then…
pic.twitter.com/z1QuikfbVG
– Michaël van de Poppe (@CryptoMichNL)
October 22, 2024
The M2 money supply is an indicator that measures 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 is 2.59%, just exceeding the US inflation rate of 2.44%. Furthermore, this number has been growing since the beginning of this year and currently stands at $21.2 trillion, according to the St. Louis Federal Reserve Bank.
Market strategist Charlie Bilello commented on the growth rate, saying, “After a brief pause, the printing of money is back.” The US money supply grew by 2.6% last year, marking the largest year-on-year increase since August 2022. After a brief pause, the printing of money is back.
https://t.co/l5IYmkeySJ
pic.twitter.com/j9YdcpX2A0
– Charlie Bilello (@charliebilello)
October 23, 2024
On October 23, Quinten Francois, co-founder of WeRate, shared a chart of M2 growth and exclaimed, “The currency printing tsunami is coming, pushing Bitcoin to six figures.”
What’s next in the short term?
BTC has fallen by about 3% from its multi-month high of $69,500 on October 21, with a trading price around $67,000, and support levels remaining unchanged during Wednesday’s Asian trading session.
Will Clemente, co-founder of Reflexivity Research, observed that Bitcoin is “turning the previous month’s high into demand,” indicating that it may be forming a new support base for an upward movement. I rarely post about low-timeframe TA/price trends, but it appears BTC is turning the previous month’s high into demand.
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– Will (@WCelementIII)
October 22, 2024
Meanwhile, “BigCheds Crypto Trading” told his 389,000 X followers that he suspects new all-time highs will occur before the US election on November 5, “unless Trump’s chances of winning increase significantly and ETF inflows continue to increase.” He then added, “Before the election, the situation remains relatively volatile between $65,000 and $70,000.”