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Bitcoin The Ultimate Hedge Against $97T Global Liquidity Bubble

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In the intricate dance of global finance, few metrics are as telling as the M2 money supply—a measure of global liquidity. Currently sitting at a staggering $97 trillion and climbing, this figure encapsulates the vast flow of cash, deposits, and near-money circulating across the global economy. For Bitcoin investors, this metric is far more than an academic curiosity; it’s a compass guiding market sentiment and price trends.

What is Global Liquidity?

Global liquidity, often equated with M2 money supply, represents the total volume of currency and near-money available in the financial system. This includes physical cash, checking and savings deposits, money market accounts, retail mutual funds, and short-term time deposits under $100,000. Importantly, M2 reflects not just static wealth but the fluid potential for spending and investing.

The Central Banks Driving Liquidity

Global liquidity isn’t monolithic. It’s the aggregate result of monetary policies from the world’s most influential central banks:

  • USA: Federal Reserve
  • China: People’s Bank of China
  • EU: European Central Bank
  • UK: Bank of England
  • Japan: Bank of Japan
  • Canada: Bank of Canada
  • Russia: Bank of Russia
  • Australia: Reserve Bank of Australia

When these central banks lower interest rates or implement quantitative easing (QE) measures, such as purchasing government bonds and securities, they effectively inject fresh liquidity into the global financial system. As liquidity expands, it opens the door for increased spending and investment in risk assets, including Bitcoin.

Related: How Declining Short-Term U.S. Treasury Yields Impact Bitcoin Price

Why Investors Should Care

For strategic investors, tracking global liquidity is akin to weather forecasting for the financial markets. Historically, Bitcoin bull markets have coincided with periods of rapid global liquidity expansion. The logic is straightforward: when central banks flood the system with cash, investors are emboldened to seek higher-yielding opportunities in safe-haven assets like Bitcoin.

Bitcoin’s appeal as a non-correlated, deflationary asset makes it uniquely positioned in this environment. Unlike fiat currencies, which central banks can create in unlimited quantities, Bitcoin operates on a fixed monetary schedule capped at 21 million coins. This scarcity is a direct contrast to the seemingly limitless expansion of M2, reinforcing Bitcoin’s narrative as “digital gold.”

The $97 Trillion Marker: A Call to Action

The $97 trillion global M2 supply underscores the relentless expansion of fiat liquidity. While this might seem like an abstract figure, its implications are very tangible for Bitcoin investors. Here’s why:

  1. Liquidity-Driven Price Momentum: Increased liquidity has historically aligned with Bitcoin’s most explosive growth phases. Investors who monitor these trends gain a crucial edge in timing their market entries.
  2. Hedge Against Inflation: As central banks expand liquidity to manage economic downturns, the purchasing power of fiat currencies erodes. Bitcoin’s fixed supply serves as a hedge against this debasement.
  3. Institutional Adoption: As professional and institutional investors increasingly integrate Bitcoin into portfolios, monitoring global liquidity becomes essential for aligning strategies with macroeconomic conditions.

Related: What Bitcoin Price History Predicts for February 2025

Looking Ahead: The Bitcoin Opportunity

Bitcoin’s relationship with global liquidity isn’t just a trend; it’s a testament to its maturation as a financial asset. For those who view Bitcoin as an alternative to traditional financial systems, the current $97 trillion liquidity landscape presents a compelling backdrop.

As central banks continue to grapple with economic uncertainties, Bitcoin remains a beacon for investors seeking transparency, predictability, and security in an unpredictable world. The rising tide of global liquidity isn’t just a narrative; it’s an invitation to reevaluate Bitcoin’s role in your investment strategy.

Now is the time to harness the power of data and foresight. Monitor liquidity. Watch Bitcoin. Invest strategically.

For ongoing access to live data, advanced analytics, and exclusive content, visit BitcoinMagazinePro.com.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct thorough independent research before making investment decisions.





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Bitcoin Faces Serious Price Compression – What Happened Last Time

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Este artículo también está disponible en español.

Bitcoin has experienced a tiring price action in recent weeks, with the price struggling to set a clear short-term direction. Investors are beginning to feel impatient as BTC remains stuck in a tight range, showing no decisive breakout. The price was testing crucial supply between $98K and $100K when the market was hit by negative news, adding further uncertainty.

On Friday, the cryptocurrency exchange Bybit suffered a massive hack, with $1.4 billion in ETH stolen. The incident triggered fear among traders, leading to increased volatility across the crypto market. However, Bybit responded quickly, working to reassure investors and prevent further market-wide panic.

As Bitcoin remains range-bound, price compression is becoming extreme, indicating that a major move could be coming soon. Top analyst Big Cheds shared an analysis on X, revealing that Bitcoin is facing its tightest daily Bollinger Bands (BBs) since August 2023, when the price was at $29.5K. Historically, such low volatility phases lead to explosive price movements, making BTC’s next move critical.

Bitcoin Price Action Signals Imminent Breakout

Bitcoin has struggled below the $100K mark since late January, with bulls unable to confirm a recovery rally despite multiple attempts. At the same time, bears have failed to push BTC below key demand levels, keeping the price above $90K. This ongoing battle between supply and demand has created an uncertain short-term outlook, leaving the market waiting for a catalyst to determine the next move.

The lack of directional clarity has led to Bitcoin consolidating in a tight range, signaling an upcoming breakout. Big Cheds’ insights on X reveal that Bitcoin now has its tightest daily Bollinger Bands (BBs) since August 2023, when BTC was trading at $29.5K.The last time BTC saw this level of price compression, the market experienced an aggressive price drop before a long accumulation phase that eventually led to a recovery. 

BTC tightest daily BBs since August of 2023 | Source: Big Cheds on X
BTC tightest daily BBs since August of 2023 | Source: Big Cheds on X

With BTC now coiling up for another breakout, traders remain cautious about the direction of the move. If BTC reclaims $100K, an explosive rally into price discovery could follow. However, a breakdown below $94K–$90K could trigger deeper corrections, making the next few days critical for the market.

If history is any indication, this period of low volatility is unlikely to last much longer. The market is preparing for a major move, and traders are closely watching key resistance and support levels for confirmation. With Bitcoin’s supply on exchanges at historically low levels and long-term holders showing resilience, a breakout above $100K could spark a new wave of buying pressure.

BTC Struggles After Volatile Friday

Bitcoin is trading at $96,000 after a highly volatile Friday, where the price spiked to $99,500 before dropping to $94,800 following news of the Bybit hack. This sudden price action unsettled investors, as BTC failed to hold above critical supply levels and experienced a rapid selloff.

BTC testing short-term demand | Source: BTCUSDT chart on TradingView
BTC testing short-term demand | Source: BTCUSDT chart on TradingView

Now, bulls must defend the $95K level throughout the weekend to prevent further downside. Holding this level would signal strength and allow BTC to push toward the $98K resistance, a key area that needs to be reclaimed for a breakout attempt above $100K.

However, losing the $95K mark could trigger a breakdown into lower demand levels, potentially retesting the $94K or even $90K zones. Market sentiment remains divided, as BTC is showing signs of compression, typically leading to an aggressive move in either direction.

For now, all eyes are on whether Bitcoin can reclaim $98K and sustain momentum, or if bears will push the price into deeper corrections. The weekend could be critical in determining the next major trend, as BTC remains stuck in a tight range between $94K and $100K with increasing volatility.

Featured image from Dall-E, chart from TradingView



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Bitcoin

One of the Most Reliable Indicators for Bitcoin Flashing Bullish Signal, Says Trader – Here Are His Targets

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Analyst and trader Kevin Svenson is leaning bullish on Bitcoin (BTC) as the flagship crypto asset hovers below the $100,000 price.

In a new video, Svenson tells his 82,400 YouTube subscribers that the weekly Relative Strength Index (RSI) indicator, which he considers “one of the most reliable signals for bullish pivots in Bitcoin land,” is suggesting a move to the upside for the flagship crypto asset.

The RSI is a momentum indicator that oscillates between 0 to 100 and is used to determine overbought or oversold levels.

“And now we are seeing, if you look closely, the weekly RSI is starting to peak above the downtrend line…

If we do get a close above this resistance line, well it may indicate a huge leg up for Bitcoin is underway.

Every single major uptrend for Bitcoin that we’ve had since the beginning of 2023 was marked by a weekly RSI breakout every single time. If we do in fact close with a weekly RSI breakout, I’m going to become very bullish on Bitcoin in the short, medium and long term.”

Source: Kevin Svenson/YouTube

Svenson says that if the RSI indicator successfully breaks out above the resistance line on Bitcoin’s weekly time frame, the flagship crypto could rally by up to 36% from the current level.

“So in between $124,000 – $134,000 is the target range for me on this parabolic trend…

I do expect that after we get this next major punch, this next major parabolic advance to $124,000 or maybe $134,000, there will be some sort of correction that comes alongside that where the market would then settle up and then punch up into the end of the year for a much higher target.”

Source: Kevin Svenson/YouTube

Bitcoin is trading at $98,797 at time of writing.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Altcoins Ready For Round 2? Expert Says Altseason ‘Has Begun’

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Este artículo también está disponible en español.

As the cycle progresses, many investors are awaiting the long-anticipated Altseason, with opinions split on whether it will happen. Several market watchers have affirmed that Altcoins (Alts) are getting ready for an explosive breakout, but others, including CryptoQuant’s CEO, have suggested a different outlook.

Few Cryptocurrencies To ‘Survive’ The Altseason

On Friday, Ki Young Ju, CryptoQuant’s founder and CEO, affirmed that the Altseason has begun. In an X thread, Ju suggested that there will not be a direct Bitcoin-to-alt rotation this cycle, noting that “stablecoin holders are favoring” Altcoins.

According to Ju, Bitcoin is no longer a quote cryptocurrency, adding that Bitcoin (BTC) Dominance doesn’t define the altseason anymore. In a December post, he explained that “Altcoins used to move together based on their correlation with BTC,” however, this pattern has now broken.

Instead, he stated that trading volume is the metric that defines it, with Altcoins currently having 2.7x the volume of Bitcoin. Ju also considers this to be a very selective and challenging altseason, with only a few Altcoins with strong user cases and narratives expected to thrive.

He added that, despite good market sentiment, there isn’t fresh liquidity, which “feels like a PvP fight over a fixed pie.” As a result, Altcoin battles “are getting fiercer,” and only a few are pumping this altseason and attracting new liquidity.

Altcoin markets are currently a zero-sum PvP game. While Bitcoin has doubled its market cap, the alt market cap is still below its previous ATH, rotating among themselves without fresh capital inflows. Only a few Alts with strong use cases and narratives will survive.

Altcoins Ready For Next Leg Up

Trader Crypto Yoddha suggested that Altcoins are “ready for round 2” after its recent performance. According to the post, the crypto market, excluding BTC and ETH, is following 2020-2021’s playbook.

During the last cycle, Altcoins experienced two legs towards its cycle top and all-time high (ATH) of $1.13 trillion. In the “first round,” they broke out from its accumulation period, seeing a small re-accumulation phase before surging to the previous top.

Altcoins
Altcoins’ chart resembles the 2020-2021 rally. Source: Crypto Yoddha on X

After reclaiming this resistance level, Altcoins started “round two,” achieving various new highs before hitting a new cycle top. Yoddha pointed out that the market is finishing the first round, as it tested last cycle’s top during the post-election pump.

Analyst Rekt Capital affirmed that the crypto market cap, excluding the top 10 tokens, “has completed the second part of its Double Bottom formation.” He explained that Altcoins had been consolidating between the $250 billion to $280 billion range since the February 3 correction.

Per the post, Alts must close above $280 billion and retest this level as support to confirm a breakout from its three-week resistance and attempt to reclaim the $300 billion mark.

Similarly, analyst Carl Runefelt stated that Altcoins have a parabolic move after breaking out of its two-month descending channel. Alts saw a 120% climb after breaking out of a 2024 multi-month descending channel. Altcoins must reclaim the $300 billion resistance to break from this pattern.

Altcoins, TOTAL2
Total crypto market capitalization, excluding BTC, is at $1.23 trillion. Source: TOTAL2 on TradingView

Featured Image from Unsplash.com, Chart from TradingView.com



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