Crypto experts have made a groundbreaking revelation connecting Bitcoin's price movements to the global M2 money supply. This correlation has led to predictions of a potential surge in the crypto market's bullish momentum by late March.
As liquidity expands globally, analysts foresee a notable rally for Bitcoin and other digital assets, expected to kick off around March 25, 2025, with the possibility of lasting until mid-May.
The M2 money supply serves as a key indicator of liquidity, encompassing various forms of cash and near-money assets. Over time, Bitcoin has shown a strong relationship with M2 fluctuations, as heightened liquidity often spurs interest in alternative assets like cryptocurrencies.
Colin Talks Crypto, an analyst on X (Twitter), shed light on this correlation, noting a sharp increase in the global M2 supply. This surge, depicted as a "vertical line" on charts, hints at an imminent rise in asset prices.
Backing this observation, Vandell, co-founder of Black Swan Capitalist, affirmed that global M2 movements have a direct impact on Bitcoin's value. He highlighted how declines in the M2 supply typically precede downturns in the Bitcoin and cryptocurrency markets around ten weeks later.
Despite potential short-term setbacks, Vandell remains optimistic about a long-term uptrend as the liquidity shift unfolds over the year, setting the stage for the next upward trend.
Moreover, Michaël van de Poppe, another notable analyst, has identified M2 expansion as one of five crucial indicators signaling an early market recovery. With shifting focus from inflation to potential Federal Reserve rate cuts, conditions are turning increasingly favorable for Bitcoin.
Looking back at past market cycles, macroeconomist Tomas pointed out that significant spikes in global M2 supply have historically coincided with Bitcoin's strongest annual performances in 2017 and 2020. This historical context raises the question of whether the dollar's weakness could trigger a similar scenario in 2025.
Yimin Xu, a macro researcher, speculated that the Federal Reserve may adjust its policies in response to economic conditions, potentially shifting from Quantitative Tightening to Quantitative Easing. Such a move could inject additional liquidity into the market, paving the way for Bitcoin's upward trajectory.
While uncertainties persist, particularly concerning the US dollar's strength and potential economic disruptions, analysts are inclined towards a bullish outlook for Bitcoin in the near future. As investors monitor macroeconomic indicators, the anticipated rally could come to fruition, sparking excitement in the crypto community.