Bitcoin’s price has been a rollercoaster lately, and some experts are predicting a rough ride ahead. Let’s break down what’s happening.
The M2 Money Supply Mystery
The price of Bitcoin seems to be linked to something called the M2 money supply – basically, all the cash and easily accessible money in the global economy. One analyst, Joe Consorti, noticed that Bitcoin’s price tends to follow the M2 supply about 70 days later. With the M2 supply recently dropping, he’s predicting a potential 20-25% correction for Bitcoin. He even pointed out that Bitcoin’s recent price drop mirrored the M2 drop a few weeks earlier.
Bitcoin’s Recent Dip: More Than Just M2?
Bitcoin is currently down around 9% from its recent high near $100,000. This isn’t just about the M2 supply though. Long-term holders have been selling off a significant amount of Bitcoin – over 507,000 BTC since September 2023! This massive sell-off is putting downward pressure on the price.
Another worrying sign is the Realized Profit/Loss (P/L) ratio hitting record highs. This suggests a lot of investors are cashing in on profits, which can lead to a price drop.
What’s Next for Bitcoin?
The future of Bitcoin is uncertain. While some believe the price will stabilize at lower levels, others warn of further drops if the M2 supply continues to fall. Bitcoin’s ability to stay above key support levels like $94,000, $88,000, and even $80,000 will be crucial in determining its next move. The chances of Bitcoin hitting $100,000 by the end of the year have also dropped significantly. All in all, it’s a pretty volatile situation.
