A key Bitcoin bull signal has flashed for the first time in nearly a year, signaling a possible price breakout.
The Global Liquidity Model Bullish Bitcoin Signal was shared by Jamie Coutts, lead crypto analyst at Real Vision. Based on this signal, Coutts expects Bitcoin to “go higher,” writing in an August 15 post on X: “My Composite Global Liquidity Momentum Model (MSI) provided the first bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from November to April before the regime turned bearish. Bitcoin could be plagued by a new round of selling, and the decline could retest $55,000!

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According to Coutts, the same bullish signal preceded Bitcoin’s 19-fold rally in the 2017 cycle and the six-fold gold rally in the 2020 cycle.

Can Bitcoin Price Double to Around $120,000?

According to Coutts’s estimate, the bullish signal could translate into a two- to three-fold increase in the price of Bitcoin.

However, much depends on the performance of the US Dollar Index (DXY) and overall global liquidity, Coutts explained:

“For BTC to achieve this, DXY would need to be well below 101, due to the ongoing injections from central banks. This would push global M2 over $120 trillion this cycle.”

However, the price of Bitcoin could face headwinds in the short term. More than $1.4 billion worth of Bitcoin options are set to expire at 8:00 a.m. UTC on August 16 unless Bitcoin is able to rebound above $60,000.

Growing M2 Money Supply Could Support Bitcoin Prices

An expanding global M2 money supply could help Bitcoin break through $60,000.

According to Coutts, in the past month, the Bank of Japan has added $400 million, while the People's Bank of China has added $97 billion worth of credit to the global monetary base, expanding it by $1.2 trillion. The US government has sold 10,000 coins again, and the price of Bitcoin has plummeted, rejecting the positive CPI! When to buy the bottom?

This trend is likely to continue due to the economics of fractional reserve banking, Coutts added:

“This is the natural state of affairs in a credit-based fractional reserve system. The money supply must continually expand to support outstanding debt. Otherwise, everything collapses.

However, Bitcoin’s price action will largely depend on inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), which have been stagnant of late.

According to Farside Investors, after two consecutive days of positive inflows, ETF inflows turned negative on August 14 as U.S. ETFs accumulated negative outflows worth $81 million.