Bitcoin’s (BTC) tight correlation with the global M2 money supply could prompt a 20% correction, says analyst Joe Consorti. Learn why opinions are divided on BTC’s outlook.
Analyst Predicts Bitcoin Could Drop 20% Due to M2 Correlation
Bitcoin’s (BTC) price may face a 20–25% correction if its long-standing correlation with the global M2 money supply continues, according to Joe Consorti, head of growth at Theya Bitcoin. This projection could see BTC retrace to $70,000, just days after narrowly missing the $100,000 milestone on Nov. 23.
M2 Correlation and Bitcoin’s Price Movements
Historical Correlation With M2
Since September 2023, Bitcoin has tracked the global M2 supply — a measure of cash and short-term bank deposits — with a 70-day lag, according to Consorti.
Increased M2 growth typically signals inflationary pressures, encouraging investors to buy Bitcoin as a hedge against inflation.
Potential 20% Correction
If the correlation holds, BTC could correct to $70,000–$75,000, Consorti noted, adding:
“We’ll have to see if BTC follows it all the way down or stops short and finds support.”
Expert Insight: Lyn Alden
Macroeconomist Lyn Alden supports the M2 correlation theory, noting Bitcoin moves in the direction of global liquidity 83% of the time over any 12 months.
Divided Opinions on Bitcoin’s M2 Dependency
Skeptics Question Correlation
Not all analysts agree with Consorti’s forecast:
David Quintieri, market commentator, dismissed the correlation, stating:
“Bitcoin (BTC) is too volatile to track it against anything.”Glassnode’s James Check attributed recent M2 declines to dollar strength, which has skewed the correlation.
Counterarguments on M2 Decline
Crypto analyst Sam KB pointed out discrepancies, stating:
“M2 is nearly at the lowest point this cycle... but BTC is rallying. What am I missing?”
Trump Policies and Dollar Strength: Implications for Bitcoin
Impact of Tariffs on USD
Donald Trump’s tariff proposals could strengthen the U.S. dollar, historically placing downward pressure on risk assets like Bitcoin.
Hedge fund manager Scott Bessent commented:
“Tariffs cause a stronger dollar.”
Bitcoin's Recent Performance
Bitcoin recently peaked at $99,571 on Nov. 23 but has since corrected to $91,988, raising concerns about its ability to reclaim six-figure territory in the short term.
A Drop or a Pause Before $100K?
Bitcoin’s (BTC) tight correlation with M2 money supply suggests a potential 20% retracement, but conflicting views highlight the market's uncertainty. While macroeconomic trends like a strong dollar could add pressure, Bitcoin’s (BTC) long-term bullish sentiment remains intact as it inches closer to the coveted $100,000 mark.
