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Bitcoin: As Global M2 goes ‘parabolic,’ is BTC ready to explode?
As the global M2 money supply surges at a parabolic rate, many investors are left wondering whether Bitcoin [BTC] is prepared to skyrocket. The consensus among experts seems to be that this explosive rally may be on its way.
Historically, it has been observed that Bitcoin tends to lag behind these spikes in M2. In other words, the cryptocurrency often waits until the global liquidity becomes incredibly excessive before reacting with a powerful upside move. However, it would appear that we are currently witnessing an extraordinary event where this divergence might not last much longer.
Currently, the world is witnessing a surge in rising cash, checking deposits, and liquid near-money assets circulating across various economies. As this happens, fiat currencies become weaker, while investors seek alternative investments that maintain their value over time. Bitcoin, with its fixed supply of 21 million coins, naturally stands as a preferred asset.
Despite M2’s sharp rise, Bitcoin is still in the process of consolidating its value. Nevertheless, we have seen how such divergences often do not persist for long. Bitcoin has historically reacted to such liquidity surges by way of delayed but powerful upside moves. And it appears this window may be closing quickly.
How does rising liquidity fuel BTC?
It’s essential to keep in mind that the increase in global M2 money supply directly influences investor behavior, which is often characterized by capital shifting into assets that resist inflation and maintain long-term purchasing power. Bitcoin thrives in such an environment due to its built-in scarcity. Unlike fiat currencies, which have no limit, the supply of BTC remains fixed.
In light of this rising M2, it appears as though the long-term bullish case for Bitcoin has become stronger. At the moment of writing, BTC is trading at $83,640 after experiencing a 1.21% increase over the past 24 hours. The asset’s price continues to compress within a descending channel and appears to be resting on resistance at $88,197 while maintaining support at $78,668.
This tightening structure combined with aggressive monetary expansion results in an ideal backdrop for a breakout. Should this occur, it could perfectly align with the global liquidity curve.
The Bitcoin network remains robust and active, offering additional evidence of its preparation for a sharp response to the overwhelming monetary expansion taking place.
Therefore, we may not have much longer to wait before witnessing a decisive move in the cryptocurrency’s value.
Source: https://ambcrypto.com/bitcoin-as-global-m2-is-goes-parabolic-is-btc-ready-to-explode/
