Bitcoin, the foremost cryptocurrency in the world, has recently surged past the $94,000 mark as market pressures begin to ease. This upward movement comes without a significant drop to earlier low figures, as market specialist Raoul Pal forecasts a potential rebound driven by an increase in the global M2 money supply, which he believes will positively influence Bitcoin’s valuation.
How Does Global M2 Supply Affect Bitcoin?
In recent discussions, the decline of the global M2 money supply over the last two years has raised concerns about liquidity’s role in supporting Bitcoin’s price. This situation has reignited interest in the historical relationship between Bitcoin’s price movements and changes in M2 supply levels.
Should Traders Worry About Market Fluctuations?
Raoul Pal, founder of Global Macro Investor, urges traders to remain calm despite recent market fluctuations. He noted, “The global money supply mirrors charts from 2016-17 and may soon see significant growth.”
Fidelity Digital Assets’ Chris Kuiper expressed worries regarding potential stagflation in the U.S. economy, reminiscent of the 1970s. He posits that in such an environment, Bitcoin could significantly outperform gold, indicating a likelihood of increased value based on historical trends.
- Bitcoin is currently navigating critical support levels after a 15% price correction.
- Traders are advised to hold their positions to avoid further losses.
- Market analysts observe a decline in speculative trading momentum, signaling increased caution among investors.
The outlook for Bitcoin’s price will likely hinge on changes in the global money supply. As traders adapt to evolving economic indicators and insights from market experts, the emphasis on prudence in navigating this volatility remains paramount.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
