In the past, Bitcoin has displayed a strong correlation with M2 fluctuations, because increased liquidity on the financial markets often stimulates demand for alternative assets such as cryptocurrencies. Colin Talks Crypto, an analyst on X, underlined this correlation, pointing to a strong increase in world M2. He described this growth as a “vertical line” on the graph, signaling an imminent increase in asset prices. According to his prediction, a Bitcoin rally, actions and the entire Crypto market should start on March 25, 2025 and extend until May 14, 2025. “The graph of the M2 of the global money mass has just recorded another vertical line. The rally for actions, Bitcoin, and the crypto will be epic, “he announced. Correlation between Bitcoin and the M2 monetary offer. Source: Colin Talks Crypto on X Vandell, co-founder of Black Swan Capitalist, argues that the movements of the world M2 directly influence the Bitcoin course. He notes that M2 decreases are generally followed by drops from the Bitcoin market and cryptocurrencies, this about ten weeks later. Despite the short -term drop potential, Vandell believes that this cycle is preparing the ground for a bitcoin bullish trend in the long term. “As we have seen recently, when the world M2 has decreased, Bitcoin & the Crypto followed about 10 weeks later. Although a new drop is possible, this decrease is naturally part of the cycle. This change in liquidity will probably continue throughout the year, preparing the field for the next rose step, “said Vandell. Likewise, another popular analyst, Michaël Van de Poppe, sees the expansion of M2 as one of the five key indicators for an early recovery of the crypto market. He also underlines that inflation being no longer the main subject of concern, in addition to expectations of drops in rate of the American federal reserve, financial conditions become more favorable for Bitcoin. “In summary: inflation is not the main subject, it should drop. Fed rate drops. The dollar is expected to weaken massively. Yields should fall. The M2 of the money mass should extend considerably. And as this process began, it is only a matter of time before altcoins and crypto take over. Bull, “he said. Historical context and projections for the Bitcoin movement The correlation between the Bitcoin course and the growth of the money supply is nothing new. Tomas, a macroeconomist on X, recently compared the previous market cycles, especially in 2017 and 2020. At the time, major increases in the world M2 coincided with the best annual Bitcoin performances. “The money supply extends worldwide. The last two major M2 global increases in 2017 and 2020 – all two coincided with mini ‘bubbles of everything’ and the best years of Bitcoin. Could we see repeatedly assisting this scenario in 2025? This will depend on a considerable weakening of the US dollar, “said Tomas. Tomas also underlined the impact of central banks policies, indicating that although large banks reduce their rates, the strength of the US dollar could present itself as a limiting factor. If the dollar index (DXY) falls to around 100 or less, this could create conditions similar to the previous Bull Markets of Bitcoin. DXY performance. Source: TradingView The role of the American federal reserve The macroeconomic researcher Yimin Xu thinks that the federal reserve could suspend its quantitative tightening policies (QT) in the second half of the year 2025. According to Yimin, this approach could potentially evolve towards a quantitative relaxation (QE) if the economic conditions require it. This change could then inject additional liquidity on the markets, supplying the ascending trajectory of Bitcoin. “I think the reserves could become too weak to please the Fed in the second half of the year. I expect them to put an end to the QT at the end of the third quarter or the fourth quarter, with a possible QE later, ”said Xu. Tomas is also going in this direction and has said that the current plan for the federal reserve is to slowly increase its assessment, which agrees with GDP growth. He also specifies that a major financial event could trigger a complete return to QE. These prospects suggest that uncertainties still remain, in particular concerning the strength of the US dollar and potential economic shocks. Nevertheless, the more general consensus among analysts points to an imminent bitcoin bullish phase. For the time being, however, investors still have to carry out their own research and monitor macroeconomic indicators in the coming months, to see if the Bitcoin predict rally will materialize. Morality of history: Bitcoin never climbs alone. Notice of non-responsibility Non-responsibility notice: In accordance with the guidelines of The Trust Project, BEINCRYPTO undertakes to provide impartial and transparent information. This article aims to provide exact and relevant information. However, we invite readers to verify the facts of their own and consult a professional before making a decision on the basis of this content.
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