Bitcoin Price To Recover With Global M2 Money Supply Soon: Wall Street Analyst

Bitcoin price has recovered above $94,000 levels after making a fresh low of $91,380 earlier today as selling pressure on the world’s largest cryptocurrency fades slightly. Veteran Wall Street investor Raoul Pal expects the Global M2 Money supply to expand once again, triggering a strong recovery in BTC from here onwards.

Will Bitcoin Price Follow Global M2 Expansion Similar to 2016-17?

The Global M2 money supply has been falling in the last two years, which led to discussions that Bitcoin doesn’t have enough liquidity support for the price rally to continue.

Founder of Global Macro Investor and Wall Street veteran Raoul Pal said investors should not panic from the recent market movements. The global money is exactly similar to the 2016-17 charts and could probably witness a strong expansion moving ahead, he added.

Source: Raoul Pal

However, the major concern among investors is that while the global money supply has shrunk in the last 2 years, Bitcoin price hasn’t retraced enough to stage a trend reversal. For several years, BTC has been closely following the M2 supply. Thus, if it repeats this pattern, we might see a drop to $70,000 before resuming the uptrend. Several market analysts are already stressing this possibility considering macro headwinds ahead.

Source: Raoul Pal

BTC Follows 2016 Pattern

However, Pal counters this fear rhetoric by showing that Bitcoin price is showing an exactly similar move to that in 2016. Sharing a chart of the current BTC movement and the 2016 pattern, Pal wrote:

“It’s all going to be just fine. Maybe a bit lower or maybe it’s done already. Either way, higher over time. Don’t expect an exact repeat but a rhyme. Valhalla waits. Don’t Fuck This Up”.

Source: Raoul Pal

Bitcoin Will Be Gold on Steroids

Chris Kuiper, the Director of Research at Fidelity Digital Assets, recently noted that the US economy could see a stagflation-like condition similar to the 1970s. The report draws parallels between the current economic environment and 1977, predicting a surge in inflation over the next three years.

However, Kuiper believes that Bitcoin can play a crucial role in this scenario while acting as “gold on steroids”. As per historical data, Gold and CPI experienced significant spikes in the three years following January 1977. The Fidelity report that this time we could see a Bitcoin price surge repeating this pattern.

Source: Fidelity

Bitcoin Price Volatility Ahead?

With the US Consumer Price Index (CPI) data due on January 15 next week, investors are bracing for BTC price volatility ahead. With Bitcoin already correcting more than 15% from its all-time high levels, it is currently trading at a crucial support level. Speaking on the current price action, popular crypto analyst Rekt Capital noted:

“Bitcoin has dwindled to pretty much the very bottom of its $91000-$101165 range. Needs to hold the $91k Range Low as support (blue) to avoid further downside and actually deepening this multi-week corrective period”.

Source: Rekt Capital

As analysts predict a BTC price recovery ahead, the Bitcoin open interest shows a decline in the speculative momentum. “The mid-term trendline (30-day SMA) peaked and is now slightly declining, while the short-term trendline (7-day SMA) has fallen below it. This indicates that traders have been closing positions, in response to uncertain market conditions,” noted Glassnode.

Source: Glassnode

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