Bitcoin Upside Anticipated Amid Global Liquidity Divergence
- Bitcoin price divergence from U.S. M2 money supply signals potential upside.
- Historic setup points to a similar pre-rally condition.
- Analysts expect a “catch-up” rally for Bitcoin.
A historic divergence between global liquidity and Bitcoin price, emphasized by U.S. M2, presents the strongest signal since 2024, indicating potential further Bitcoin upside.
This divergence suggests Bitcoin’s price could rise as liquidity catches up, with institutional investors and crypto analysts anticipating renewed bullish trends, impacting broader market dynamics.
A historic divergence between global liquidity and Bitcoin price signals a potential upside, according to crypto analysts.
This divergence could trigger a Bitcoin price rally, echoing past cycles and boosting market participation.
Bitcoin Lagging Behind U.S. M2: A Bullish Signal
Bitcoin’s current price is lagging behind the U.S. M2 money supply, marked as a bullish signal by CF Benchmarks. Analyst consensus suggests this gap indicates a potential price surge.
Arthur Hayes and Raoul Pal highlight the significance of liquidity cycles and predict a catch-up rally for Bitcoin, comparing the present scenario with past liquidity-driven rallies.
“When fiat liquidity rips and Bitcoin lags, history favors buying the dip. Don’t ignore the playbook.” – Arthur Hayes, Former CEO, BitMEX
Institutional Moves and Fed Policy Boost Optimism
Immediate effects include increased institutional interest and strategic accumulation in the $114,000–$116,000 range. Fed policy expectations of a rate cut enhance the bullish sentiment for Bitcoin.
Financial markets perceive Bitcoin as a portfolio diversifier, with no new restrictive policies impacting this view. U.S. Stablecoin Act and shrinking volatility provide a favorable backdrop.
Past Liquidity Divergences Preceded Major Rallies
Past liquidity divergences in 2016, 2019, and 2021 preceded significant Bitcoin rallies. Analysts view the current divergence as an indicator of a bullish trend similar to prior cycles.
Experts like Willy Woo assert that macro liquidity conditions support a potential breakout, further reinforced by historical precedent and strong market structure.
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