The crypto market is going through a rough patch, and Bitcoin is no exception. After flirting with the $100,000 milestone, BTC is now trading around $93,230, with some analysts predicting a drop to $92,000 or lower. The once-unstoppable rally seems to have hit a wall, and the effects are rippling across the market. Major altcoins like Dogecoin (DOGE) and Solana (SOL) have also suffered big losses, leaving investors uneasy.
Bitcoin’s Volatility Brings M2 Money Correlation into Focus
Bitcoin’s recent price movements have reignited talk about its connection to M2 money supply. Analysts point out that BTC has been closely tracking global liquidity trends with a noticeable lag. This pattern suggests Bitcoin could drop another 20%, potentially landing near $88,000.
Joe Consorti, a crypto analyst, highlighted this connection, calling it “shockingly accurate.” However, not everyone agrees. Critics argue that Bitcoin’s volatility makes such correlations unreliable. Regardless, the current price action, combined with selling pressure from long-term holders, signals a cooling-off period for BTC. Glassnode’s data shows over 366,000 BTC offloaded monthly, adding more weight to the bearish outlook.
I’d assume much of this M2 decline is due to dollar strength right? Effectively ‘devaluing’ the M2 of the ROW.
— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) November 25, 2024
Crypto Market Faces Sharp Losses as Dogecoin and Solana Slide
The broader crypto market has been hit hard, with its total capitalization dropping by 5% in just 24 hours. Altcoins like Dogecoin and Solana have led the decline, with DOGE losing over 12% and SOL down about 10%. Bitcoin’s dip below $94,000 didn’t help matters, as market-wide liquidations reached $691 million.
DOGE saw a spike in trading activity, but it wasn’t enough to support its price. Similarly, Solana faced intense sell-offs, dragging its market cap down by billions. Analysts describe this downturn as a necessary correction, with excessive leverage driving much of the recent volatility. It’s a reminder that the crypto market remains as unpredictable as ever.
ETFs Reflect Growing Nervousness in the Crypto Market
ETFs are another indicator of the market’s shaky footing. Spot Bitcoin ETFs saw $438 million in outflows recently, marking a stark reversal from the billions in inflows earlier this month. The outflows coincided with Bitcoin’s failure to maintain its $94,000 support. Funds like Grayscale’s GBTC and Bitwise’s BITB were among the hardest hit.
Interestingly, Ethereum ETFs fared slightly better, recording modest inflows. However, the overall trend underscores growing caution among investors. With BTC losing steam and altcoins faltering, the ETF market reflects the broader uncertainty gripping the crypto space.
Can Bitcoin Regain Momentum
The big question is whether Bitcoin can bounce back. Some analysts believe BTC might find support around $85,000, while others think the rally isn’t entirely over. Yet, with M2 money supply trends and market corrections looming large, the road ahead looks bumpy.
For now, the crypto market remains volatile. Glassnode’s reports of heightened selling by long-term holders and the struggles of major altcoins like Dogecoin and Solana add to the bearish sentiment. As economic factors like inflation and Federal Reserve policies come into play, crypto enthusiasts are left hoping for calmer waters soon.
The crypto market’s wild ride continues, proving once again that volatility is its only constant. While Bitcoin’s potential to hit $100,000 isn’t entirely off the table, the journey there looks anything but straightforward. Stay tuned, stay informed, and, as always, trade carefully.
