Bitcoin (BTC) continues to experience pressure following the US blanket tariffs of 10% that went into effect on April 5. The flagship cryptocurrency declined by more than 7% in the past 24 hours before making a slight recovery, trading in the low $80,000s at the time of writing.
M2 Money Supply Surge May Help Bitcoin
In an X post published today, crypto analyst Titan Of Crypto hinted that – despite the prevailing pessimism – a Bitcoin rally might be imminent following a surge in the global M2 money supply. The analyst shared a chart indicating how BTC has historically followed the M2 money supply with a slight lag.
For the uninitiated, the M2 money supply is a broad measure of the total money circulating in an economy, including cash, checking deposits, and easily convertible near-money assets like savings accounts and small time deposits. Central banks monitor M2 to assess economic conditions and guide monetary policy decisions.
As mentioned earlier, past data shows that BTC has a strong correlation with changes in the M2 money supply, often exhibiting a lag of approximately 70 to 107 days. For example, during the height of the COVID-19 pandemic, substantial increases in the M2 money supply due to stimulus measures were followed by significant Bitcoin rallies.
Fellow crypto analyst Merlijn The Trader echoed Titan’s sentiments. The trader shared a chart highlighting the reversal area in the M2 money supply, suggesting that if the correlation remains strong, similar behavior could be expected in BTC.
Just A Healthy Pullback For BTC?
While there is considerable concern surrounding BTC’s current sluggish price action – aligned with the declining global equity markets – some analysts view the current price pullback as a healthy correction rather than the end of the bull market.
Bitcoin analyst Bitcoin Wukong shared their thoughts on the top cryptocurrency’s recent price action. In an X post published today, the analyst wrote:
If you’re lost in the noise – zoom out. This pullback is just a correction following the Trump-driven rally, not the start of a bear market. Zooming out, the $66K–$73K zone still shows strong structural support.
That said, BTC faces multiple strong resistance levels, as outlined by Titan Of Crypto in one of his recent analysis posts. The trader noted that BTC must overcome the Ichimoku Cloud resistance around the $88,000 price level.
However, BTC managed to maintain bullish momentum with a positive March monthly candle close. At press time, BTC trades at $78,566, down 5% in the past 24 hours.
Featured Image from Unsplash.com, charts from X and TradingView.com
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