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Bitcoin 
$104,375, the largest cryptocurrency globally, surged above $94,000 as selling pressure eased, without dipping to previous low levels. Wall Street veteran Raoul Pal predicts a rebound for Bitcoin, anticipating a rise in global M2 money supply, which he believes will positively impact the cryptocurrency’s price.
The Impact of Global M2 Supply on Bitcoin
Over the past two years, the decline in global M2 money supply has sparked debates about the lack of liquidity support for Bitcoin’s price rally. This situation has once again brought attention to the historical correlation between Bitcoin’s value and M2 supply.
Raoul Pal’s Caution to Traders
Raoul Pal, founder of Global Macro Investor, advises traders not to panic amid recent market movements. He stated, “The global money supply resembles the charts from 2016-17 and may experience strong expansion soon.”
Chris Kuiper, Research Director at Fidelity Digital Assets, expressed concerns that the U.S. economy might face stagflation similar to the 1970s. Kuiper suggests that in such a scenario, Bitcoin could play a significant role, outperforming gold and likely increasing in value as it has in past comparable periods.
“Bitcoin prices will be fine. They may drop now or have dropped already. Regardless, they’ll rise over time. Don’t expect a complete repeat, but a similar rhythm.” – Raoul Pal
With the upcoming U.S. Consumer Price Index (CPI) data, traders are bracing for price fluctuations in Bitcoin. After correcting over 15% from historical peaks, Bitcoin is trading at a crucial support level.
“Bitcoin remains just below the $91,000-$101,165 range. It needs to hold this support level to prevent further declines.” – Rekt Capital
While analysts note a recovery trend for Bitcoin, Glassnode’s analysis indicates a decline in speculative momentum among open positions. This suggests that traders are closing their positions due to uncertain market conditions.
The future performance of Bitcoin could be closely tied to shifts in global M2 money supply. Traders are navigating the market by considering economic indicators and expert opinions, emphasizing the importance of caution in volatile conditions.
