Bitcoin Could Hit New Highs as the M2 Money Supply Decreased
Analyst Merlijn notes that increases in Bitcoin’s price often follow drops in the M2 money supply.
Records over the years suggest that BTC rises to higher levels after M2 drops to its lowest point.
BTC’s value could top $128,000 if the trend is maintained.
Merlijn The Trader has mentioned that Bitcoin (BTC) could soon set new records. A recent post by him showed that BTC’s price tends to move in line with the M2 money supply in the U.S., which represents the total amount of money widely available for use.
A Drop in Bitcoin and M2 Together Show a Trend Is Developing
According to the analyst, Bitcoin and M2 have both decreased this year, but their historical trends suggest a recovery may soon occur. Merlijn pointed out that, on the two occasions when the M2 money supply dropped in recent history, the price of BTC also declined.
Whenever the slump occurred, BTC soon turned things around, escaped the downturn, and climbed to higher values. March 2025 is marked as a “Reversal Area” where M2 reached its lowest point and BTC began to recover. Another pattern, where both assets lean together and then recover, is now showing in the market.
Chart Shows that Bitcoin Could Rise to as High as $128,000.
The analyst highlighted the consistency of this pattern by noting that the same setup could potentially give rise to similar results. There are two notable dips on the chart, one which happened in early May and will happen again in June. Following every decline, Bitcoin rose quickly, recording a new all-time high (ATH).
Source: X @MerlijnTrader
When the analysis was conducted, Bitcoin was priced at $103,445. However, Merlijn believes that the pattern points toward Bitcoin likely hitting $128,000, as the chart’s green “New ATH” box suggests.
Traders and investors are currently monitoring the correlation between the M2 money supply and the price of Bitcoin. If M2 continues to go down, another significant rally for BTC is possible soon.
Right now, $104,525.70 is the price for BTC on CoinMarketCap, down just 0.29% for the day. In the last 24 hours, $42.79 billion in BTC was traded, 28.89% less than the day before.
Filed under: Bitcoin - @ June 1, 2025 2:00 am