Bitcoin recently hit a new all-time high of $111,900, but then quickly dropped below $110,000. This caused some investors to worry. However, some analysts believe the rally isn’t over yet.
Macroeconomic Indicators Suggest Continued Growth
One analyst, Colin, points to the Global M2 Money Supply as a reason for optimism. This indicator reflects the total amount of money circulating in major global economies. It recently hit a new all-time high.
Colin’s analysis shows a strong correlation between the Global M2 Money Supply and Bitcoin’s price, with an 82-day lag. Historically, Bitcoin’s price has mirrored the M2 growth, suggesting further price increases are likely. The correlation is particularly strong over a 1.5-year period, reaching 93%. This suggests Bitcoin’s recent rise is tied to broader monetary expansion.
The recent dip to $107,500 is seen as a healthy correction within a larger upward trend, especially considering the global money supply growth. The fact that Bitcoin held above the $102,000-$104,000 support level is also positive.
Social Sentiment vs. Data
Despite the new high and Bitcoin holding its support levels, many people remain skeptical. Colin notes this disbelief is ironic given the strong supporting data.
The Crypto Bull Run Index (CBBI) currently sits at 79, far from the “overheated” level. This suggests there’s still plenty of room for Bitcoin to grow. Colin’s chart projects Bitcoin could easily surpass $130,000 if the M2 correlation continues.
A Successful Prediction
Interestingly, Colin’s analysis has proven accurate before. Back in April, when Bitcoin was around $74,000, he predicted a major breakout in May. That prediction came true.
At the time of writing, Bitcoin is trading around $109,670.
