The post Analyst Cautions Against Overcommitting as Bitcoin May Benefit from Rising Global M2 Money Supply appeared on BitcoinEthereumNews.com.

The cryptocurrency market is poised for potential shifts as analysts note a significant correlation between the rising M2 money supply and Bitcoin prices. Despite the recent volatility, experts like Pav Hundal maintain a cautiously optimistic outlook on the cryptocurrency’s future performance. A report from Cointelegraph highlights Hundal’s view that “this isn’t a market to bet your whole stash on,” emphasizing a measured approach while forecasting a strong performance later this month. Analysts signal potential Bitcoin rally fueled by rising global M2 money supply, yet caution against aggressive trading strategies in volatile markets. Insights on the Impact of M2 Money Supply on Bitcoin Prices Recent analyses suggest a critical relationship between the M2 money supply and Bitcoin prices, with many experts advocating that historical patterns reveal a bullish trend under current economic conditions. Swyftx analyst Pav Hundal highlighted that the current global loosening measures are often viewed as an indicator of optimism for cryptocurrencies, particularly Bitcoin. According to MacroMicro data, the year-on-year change for the combined M2 supply of the four major central banks has reached 3.65% in January. This uptick is noteworthy, as it indicates increased liquidity in the market. The relationship is founded on the understanding that heightened liquidity typically results in greater investment in risk assets, including cryptocurrencies. The Historical Trend: M2 Money Supply and Bitcoin Correlation Historical trends support the optimistic expectation that rising M2 money supply generally leads to higher Bitcoin values. In fact, economist Lyn Alden’s recent research establishes that Bitcoin’s price follows alterations in global M2 approximately 83% of the time. Such a correlation suggests that traders and investors may find value in closely monitoring M2 movements as they contemplate their investment strategies. Commentary from various analysts, including noted crypto influencers, provides further insight. They argue that increased liquidity often supports upward price movements…

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Filed under: News - @ February 26, 2025 6:27 am