Originally published on: August 03, 2024
Bitcoin bulls are shifting their focus to the M2 money supply as the price of BTC dips to $62,000 on August 3 following a fresh liquidation cascade. Despite the market turmoil, there is optimism about the potential impact of global liquidity on Bitcoin’s price action.
After hitting multi-week lows of $60,435 on Bitstamp, BTC saw a 3% rebound to reclaim the $62,000 mark. This recovery came amidst a grim day for global stocks, with the Nikkei experiencing a 6% drop, setting the stage for further losses on Wall Street.
As the U.S. released disappointing employment data, panic spread in the markets, resulting in Bitcoin losing nearly $5,000 and breaching key support levels. This triggered a wave of liquidations totaling $230 million for crypto longs on both August 1 and August 2.
Experts like Michaël van de Poppe of MNTrading foresee the Federal Reserve cutting interest rates in September, which could act as a bullish catalyst for cryptocurrencies and risk assets. The possibility of a rate cut has traders speculating on the extent of the decrease, with odds favoring a 0.25% cut.
Despite the market uncertainty, bullish sentiment for Bitcoin prevails. Jeff Ross from Vailshire Partners highlights the correlation between the global M2 money supply and BTC/USD, suggesting a potential uptrend for Bitcoin in the context of expanding global liquidity.
As traders anticipate Bitcoin retesting the bottom of its long-term trading range, the market remains volatile and unpredictable. It’s essential for investors to conduct thorough research and analysis before making any investment decisions. Stay informed and explore more articles like this for valuable insights into market trends and opportunities.