Crypto expert Kyle Chassé has pointed to rising global liquidity to prove it Bitcoin is currently undervalued. His comments come as fiat currencies such as the dollar and yen continue to weaken due to concerns over governments’ fiscal policies.
Global liquidity points to a Bitcoin target of $270,000
In one X messageKyle Chassé shared an accompanying chart highlighting a Bitcoin target of $270,000 based on rising global liquidity. The expert stated that the herd says $90,000 BTC is expensive, but the fiat ledger has reminded everyone why the digital ledger exists. This came when he revealed that the global M2 money supply has reached a record $98 trillion, driven by aggressive expansion from the US, the Eurozone, China and Japan.
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Chassé further noted that global liquidity growth year-to-date (YTD) is now 6.2%, the fastest pace since the response to the 2020 pandemic. The expert warned that in a system where the fiat denominator is permanently diluted, fixed assets do not rise in price, but cash “becomes loudly worthless.” As such, he believes it BTC is a good hedge against currency devaluation and possible inflation.
The expert’s comments come particularly at a time when the dollar has been declining, with the DXY falling since the beginning of the year. The yen has also fallen this year as these fiat declines come amid a push by governments to increase spending. Increased government spending is considered bullish for Bitcoin given its steady supply compared to fiat currencies, which continue to depress governments. BitMEX co-founder Arthur Hayes had also recently predicted that an increase in dollar liquidity would lead to higher BTC prices.
However, that has yet to be the case as Bitcoin continues to trade as a risky asset and has wiped out its gains year-to-date (YTD) amid political tensions in the US. A US government shutdown also seems more likely by January 31, leading to BTC falling below $87,000 yesterday.
BTC will rise once liquidity returns
Crypto expert Merlijn assured that Bitcoin will rise once liquidity returns. In one X messagehe urged market participants to zoom out and that the BTC pattern would become clear. The expert revealed that the flagship crypto has already recorded waves 1, 2 and 3 lower highswhich indicates trend fatigue.
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Now Bitcoin is looking to form waves 4 and 5, which would mean a reset, absorption and base building. Merlin suggested that the bottom may not have been reached yet, but once it does, BTC could rise to $124,000, which would put it close to its current price. all-time high (ATH) of $126,000.
At the time of writing, the Bitcoin price is trading around $87,700, down in the past 24 hours. facts from CoinMarketCap.
Featured image of Pngtree, chart from Tradingview.com