- The global m2 money supply has become positive.
- Historical patterns indicate that BTC may now soar on the charts
Bitcoin [BTC]The world’s leading cryptocurrency, continues to cause uncertainty among traders, whales and institutions. Especially as the market is waiting for better conditions in the last quarter of the year.
Historically, Bitcoin has soared when the global M2 money supply has increased. With the global M2 turning positive, traders are anticipating a potential bull run. A similar one to that of late October 2023 and early January 2024, after which BTC reached new all-time highs.
At the time of writing, BTC/USDT appeared to be correcting into a bullish flag pattern. Another BTC surge could be in the offing, with the Federal Reserve’s expected rate cut being key.
Source: Seth Fin/X
A cut of 25 basis points seems likely. However, in the financial markets, large movements must first calm down before they become visible.
Bitcoin is trading back at the mid-range
At the time of writing, BTC was trading in the middle of its price range within a downtrend channel.
A breakout to the upside could lead to a push to the top of the channel and a possible breakout. The lower limit was at $51,000, while the upper resistance was $66,000.
Although BTC seemed to consolidate, its strength remains evident. Mainly because bears have failed to break the lower trend line.
Source: TradingView
If Bitcoin breaks the upper trendline and stays above it, the price of BTC could see a significant rally, potentially taking it to new highs. This can be supported by the global M2 vs Bitcoin price chart.
The MVRV z-score emphasizes low unrealized gains
The MVRV z-score, a key indicator of market sentiment, stood at around 1.9 at the time of writing. This suggested that BTC has gradually declined while the network’s average cost base has increased.
By extension, this means that there are low unrealized gains in the market, leaving more room for upward movement.
Historically, when the MVRV z-score has been at these levels, Bitcoin has seen significant upward trends. The case studies of 2012, 2020 and 2023 are good examples.
Source:
Addresses with more than 0.1 Bitcoin near ATH
Additionally, the number of Bitcoin addresses holding at least 0.1 BTC is approaching a new all-time high.
This means that long-term holders, often referred to as “strong hands,” are accumulating Bitcoin, which supports the case for higher BTC prices.
As more strong hands buy BTC, this strengthens the market. This increases the chance of a rising trend in the charts.
Source; Bitcoin Magazine PRO
Bitcoin’s net position change in the short term
Finally, the short-term Bitcoin holder net position change revealed that many recent buyers, who came in during the last fear of missing out (FOMO) peak, are now exiting.
This is often a sign of market capitulation, indicating a potential bottom. When short-term holders capitulate, this often precedes a rise in BTC prices.
Source: CryptoQuant
In conclusion, Bitcoin’s price is primed for potential growth. With strong on-chain metrics and historical trends favoring an uptrend, BTC could see a significant rally if global market conditions improve and the Federal Reserve implements a rate cut.