Key Points
- Bitcoin’s selling pressure is easing up, with prices recovering above $94,000.
- Wall Street veteran investor Raoul Pal predicts further recovery for Bitcoin, despite concerns over the Global M2 money supply.
Bitcoin’s selling pressure seems to be lessening, as the cryptocurrency’s prices have risen above the $94,000 mark. This recovery comes after a brief period of prices hovering around $91,300.
According to seasoned Wall Street investor Raoul Pal, we should anticipate more recovery from Bitcoin (BTC) in the future. This is despite the ongoing expansion of the Global M2 money supply.
Concerns over Bitcoin Price and Global M2 Money Supply
Currently, there are worries about whether Bitcoin’s price will mimic its 2016 pattern, which correlated with the expansion of the Global M2 money supply.
Given that the Global M2 money supply has been decreasing for the past two years, investors are apprehensive about the possibility of Bitcoin replicating this pattern. Many fear that Bitcoin may lack the liquidity necessary to sustain its price rally.
Despite these concerns, Raoul Pal holds a different viewpoint. The founder of Global Macro Investor believes investors should not be overly concerned about recent market movements.
Pal points out that the global money charts mirror their state in 2016/17, indicating that a strong expansion is likely on the horizon.
Bitcoin and the M2 Supply Pattern
Investors generally agree that the global money supply is poised for expansion, especially considering its significant contraction over the past two years. However, their primary worry is that Bitcoin’s price did not retrace enough during this period to suggest a significant trend reversal.
Historically, Bitcoin’s prices have closely followed the M2 supply pattern. If this trend continues, many market experts believe that Bitcoin may need to drop to $70,000 before it can make a strong recovery.
Despite these market fears, Pal remains optimistic. He insists that Bitcoin’s price is mirroring its 2016 movement. He even compared the charts and made a statement saying, “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”.
Currently, it appears that traders lack confidence in the market, leading to a decrease in Bitcoin’s open interest. This suggests that traders may have been closing their positions. Glassnode confirmed that “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”.
