Bitcoin Pulls Back Despite Record $125 Trillion Global Money Supply
Bitcoin (BITSTAMP:BTCUSD) has retreated over the past month to around $81,310 despite global money supply climbing to an all-time high of approximately $125 trillion. While expanding liquidity is often viewed as a catalyst for cryptocurrency gains, historical data indicates that the direction and speed of money growth have a far stronger effect on price performance than the absolute level of liquidity.
Global M2 growth has decelerated from 8% to 7% since late August, with total money supply dropping nearly 1% from its early-September peak. A stronger U.S. dollar, boosted in part by the Federal Reserve raising interest rates to between 3.75% and 4.00%, has reduced the dollar-denominated value of foreign currencies. A key momentum indicator that turned positive in mid-August now appears fragile and could shift negative by mid-November if current trends persist.
In the near term, investors are watching immediate support between $80,371 and $81,638, which held over the weekend, along with a deeper moving-average support near $76,800. On the upside, resistance sits at $82,400 and $84,134.
Key points
- Global M2 money supply reached a record $125 trillion, up 7% year-over-year, but Bitcoin has dropped over the past month.
- Historical data shows accelerating money growth drives Bitcoin gains, while slowing growth leads to sluggish performance.
- A key liquidity momentum signal turned positive in August with Bitcoin near $63,000, but could flip negative by mid-November.
- Federal Reserve rate hikes to 3.75%-4.00% and a 3% dollar rally since September have reduced foreign M2 values in dollars.
- Bitcoin faces micro support between $80,371 and $81,638, with overhead resistance at $82,400 and $84,134.
Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org
How we writeDisclaimerQuestions and answers
Why is Bitcoin falling if global money supply is at a record high?
Bitcoin price movements depend more on whether money supply growth is accelerating or slowing rather than the overall record level of global liquidity.
When could the Bitcoin money growth signal turn negative?
If global money supply growth stays around 7%, the liquidity momentum signal is projected to turn negative around mid-November.
What key support and resistance levels is Bitcoin watching?
Short-term support lies between $80,371 and $81,638, with deeper support at $76,800. Overhead resistance sits at $82,400 and $84,134.