As a seasoned crypto investor with a decade of experience under my belt, I’ve seen my fair share of market fluctuations and analyst predictions. While I don’t claim to have a crystal ball, I do find Joe Consorti’s analysis intriguing, given Bitcoin’s historical correlation with the global money supply. If this trend continues, we might indeed see a correction before $100,000, as he suggests.
If Bitcoin maintains its historical link with the world’s money supply in cash and bank deposits, as suggested by a financial expert, it might move back towards the $70,000 level.
To date, the accuracy of this correlation has proven surprisingly consistent,” as expressed by Joe Consorti, Head of Growth and Bitcoin Analyst, in his November 26 post.
BTC may be in for a correction before $100,000
Consorti noted that we’ll need to observe whether Bitcoin (BTC) will continue its descent or instead, find a level of support and halt.
In a post from the previous day, November 25th, Consorti noted that since September 2023, Bitcoin’s price movement has followed global M2, which is an estimate of cash and short-term bank deposits, with roughly a 70-day delay.
Historically, the expansion of M2 money supply has generally coincided with Bitcoin’s past price surges, or bull markets.
Historically, Bitcoin’s value tends to rise when the M2 money supply expands, because an increase in M2 can indicate potential inflation, leading investors to consider Bitcoin, a riskier asset, as a way to protect their funds from inflationary impacts.
Consorti stated that there’s no need for panic, but if the current trend persists, there might be a potential drop of 20-25% in the value of Bitcoin.
In a report published in September 2024, macroeconomist Lyn Alden pointed out that the price movement of Bitcoin tends to align with global liquidity about 83% of the time over a 12-month cycle.
However, not all analysts agree with Consorti’s forecast.
Market commentator David Quintieri wrote, “Bitcoin is too volatile to track it against anything.”
He mentioned that all of these options are merely diversions. Achieving it through the stock market is a more practical approach, he suggested.
James Check, a leading analyst at Glassnode, stated that “a significant portion of the decrease in M2 can be attributed to the strengthening dollar, which in essence reduces the value of M2 outside the U.S.
In my own words, as a crypto investor, I’ve noticed an interesting pattern: Whenever the M2 value reaches a peak, it seems to be closely followed by a spike in Bitcoin’s price, with the exception of this current cycle. This trend has been observed in past market cycles, but not so much in the one we’re currently navigating.
“M2 is nearly at the lowest point this cycle… but BTC is rallying. What am I missing?” he added.
Trump policies may strengthen dollar
Some analysts, however, warn that President-elect Donald Trump’s plan to impose tariffs on imported goods could strengthen the US dollar — a trend that has historically pressured riskier assets like Bitcoin.
In an interview with Bloomberg on November 5th, hedge fund manager Scott Bessent stated that “Tariffs lead to a strengthening of the U.S. dollar.
“A weaker dollar with tariffs is an economic abnormality.”
Currently, as we speak, Bitcoin is being exchanged for approximately $91,988. This valuation comes just a few days after it came close but didn’t quite reach the much-anticipated $100,000 mark. The highest point Bitcoin has reached so far was on November 23rd, where its value peaked at $99,571.
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2024-11-27 07:20