The divergence between global liquidity and Bitcoin's price indicates potential growth. Analysts predict that this situation may lead to bullish trends in the cryptocurrency market.
Divergence Between Liquidity and Bitcoin Price
A historic divergence between global liquidity and Bitcoin price, emphasized by U.S. M2, signals potential further Bitcoin upside, according to analysts. This divergence suggests that Bitcoin's price could rise as liquidity catches up.
Bullish Signal Based on Historical Data
Bitcoin's current price lags behind the U.S. M2 money supply, marked as a bullish signal by CF Benchmarks. Analyst consensus indicates that this gap suggests a potential price surge. Arthur Hayes and Raoul Pal highlight the significance of liquidity cycles and predict a 'catch-up rally' for Bitcoin, comparing the current scenario with past liquidity-driven rallies.
Impact of Institutional Investments and Fed Policy
Increased institutional interest and strategic accumulation in the $114,000–$116,000 range boost market optimism. Expectations around Fed policy of a rate cut enhance bullish sentiment for Bitcoin. Financial markets perceive Bitcoin as a portfolio diversifier, with no new restrictive policies impacting this view.
Based on historical data and current liquidity analysis, there is a favorable environment for potential Bitcoin growth, which could contribute to the revival of its bullish trends.
