Bitcoin price is closely correlated with the global M2 money supply. Analysts are assessing the possibility of BTC price falling below $88,000. Market data suggests that Bitcoin is subject to short-term volatility.$BTC
Bitcoin is trading at $93,365 with the correction experienced in recent days, and this correction is expected to continue in parallel with the global M2 money supply and poses a risk of falling below $88,000. Bitcoin has lost more than 9% in the last four days after rejecting the $100,000 level. Market analysts state that this correction may continue as a result of the slowdown in BTC movements as long-term investors take profits.
Historically, the Bitcoin price chart has followed a similar pattern to the global M2 money supply, and the current correction seems to be in line with this liquidity indicator. According to popular analyst Joe Consorti, BTC price movements since September 2023 reflect the M2 supply with a 70-day lag. According to the Glassnode report, there has been an increase in long-term investors (LTH) and selling pressure has reached a monthly level of 366,000 BTC. This marks the largest selling movement by long-term investors since April 2024.
Bitcoin Price Has Potential to Drop Below $88,000
As the BTC price has lost one of its critical support levels at $94,000, market analysts have started setting lower price targets. Highlighting key liquidity zones for Bitcoin, crypto analyst Justin Bennett noted that Bitcoin’s price has its largest block of liquidity at $73,000.
Analyst Consorti warned that Bitcoin could face a 20-25% correction from its recent highs if the current trend continues. However, Consorti is taking a cautious approach to see if BTC will fully follow the global M2 path.
“If the trend continues, we could see a 20-25% correction from Bitcoin’s recent highs. But it will be difficult to see if BTC will move in line with global M2,” he said.
Bitcoin is currently trading at $92,864, down 1.95%. Its market cap is $1.84 trillion, with a daily trading volume of $91.14 billion. In addition, shares of MicroStrategy, the largest institutional holder of Bitcoin, have lost 35% in just four days.
Bitcoin’s linear relationship with the global M2 money supply forces investors to be cautious given the current economic conditions. Selling pressure from long-term investors and changes in market liquidity could cause Bitcoin to fluctuate in the short term. It is important for investors to closely monitor market developments and carefully manage their risks.