Originally published on: November 27, 2024
Bitcoin’s price trajectory could see a significant decline of up to 20%, according to analyst Joe Consorti, if the leading cryptocurrency continues to mirror movements in the global M2 money supply, which includes cash and bank deposits.
Consorti, the head of growth at Theya Bitcoin and BitcoinBTC, noted a striking correlation between Bitcoin’s price movements and the M2 money supply in a recent analysis. He highlighted that historically, Bitcoin has followed the M2 money supply with a 70-day lag since September 2023.
The correlation between Bitcoin and M2 has been particularly strong during previous bull runs, as investors turn to cryptocurrencies like Bitcoin as a hedging strategy against inflation when faced with increased money supply leading to inflationary pressures.
While Consorti’s forecast suggests a potential correction for Bitcoin, not all analysts share the same view. Some experts argue that Bitcoin’s volatility makes it challenging to track against traditional economic indicators like the M2 money supply.
Market dynamics, including factors like a strengthening US dollar due to proposed tariffs by President-elect Donald Trump, could also influence Bitcoin’s price movements in the future. Despite these uncertainties, Bitcoin continues to rally, defying conventional correlations and expectations.
As Bitcoin approaches the $100,000 price level, investors and traders should exercise caution and conduct thorough research before making any investment decisions. The cryptocurrency market remains highly volatile, and unexpected events can quickly impact prices. Stay informed and explore diverse perspectives to navigate the ever-changing cryptocurrency landscape. Subscribe to the Markets Outlook newsletter for weekly insights and updates on the latest market trends and opportunities.
