The Expansion of M2 Money Supply Indicates Potential Extension of Bitcoin Bull Market

CoinWorld reported:
The historical cycles of the Bitcoin market are closely related to the M2 money supply and expanding liquidity.
On October 22nd, market analyst Michaël van de Poppe delved into data points and correlations between periodic peaks and currency supply. He pointed out that in 2017, the M2 supply continued to expand significantly, and this cycle lasted until the end of the year, with BTC reaching a peak of $20,000.
During the bull market in 2021, the M2 supply surged, and the cryptocurrency market followed suit, reaching its peak in November of that year. However, the currency supply continued to expand into 2022, but due to interest rate hikes and the collapse of several well-known cryptocurrency companies, the market remained sluggish throughout the year.
Currency supply impact
Analysts predict that if the M2 money supply continues to expand for another year and a half.
“In general, if the M2 supply expands until mid-2026, liquidity expansion may prolong the cycle.”
This chart shows some super important data points that I think are crucial for this cycle.
– In 2016-2017, the M2 supply continued to expand significantly, and this cycle lasted until the end of 2017.
– In 2021, the M2 supply was basically vertical, and then…
pic.twitter.com/z1QuikfbVG
– Michaël van de Poppe (@CryptoMichNL)
October 22, 2024
The M2 money supply is an indicator of the amount of currency in circulation. It includes M1 money, which is physical cash and deposits, as well as “less liquid” money.
Currently, the growth rate of the M2 supply is 2.59%, just surpassing the U.S. inflation rate of 2.44%. Moreover, this number has been growing since the beginning of this year and is currently at $21.2 trillion, according to the Federal Reserve Bank of St. Louis.
Market strategist Charlie Bilello commented on the growth rate, saying, “After a brief pause, the printing press is back.”
The U.S. money supply grew by 2.6% last year, the largest year-on-year increase since August 2022. After a brief pause, the printing press is back.
https://t.co/l5IYmkeySJ
pic.twitter.com/j9YdcpX2A0
– Charlie Bilello (@charliebilello)
October 23, 2024
On October 23rd, Quinten Francois, co-founder of WeRate, shared a chart of M2 growth and exclaimed, “The currency printing tsunami is coming, pushing Bitcoin into six figures.”
Short-term outlook?
BTC has dropped about 3% from its multi-month high of $69,500 on October 21st, trading around $67,000 on Wednesday morning during the Asian trading session with support remaining intact.
Will Clemente, co-founder of Reflexivity Research, observed that Bitcoin is “turning the previous month’s high into demand,” indicating that it may be forming a new support base for an upward move.
I rarely post about low-timeframe TA/price action, but it appears BTC is turning the previous month’s high into demand.
pic.twitter.com/cyU1RweWx6
– Will (@WClementeIII)
October 22, 2024
Meanwhile, “Big Cheds Crypto Trades” told his 389,000 followers that he expects new all-time highs to occur before the U.S. election on November 5th, “unless Trump’s chances of winning improve significantly and ETF inflows continue to increase,” and added, “the basic situation remains relatively volatile between $65,000 and $70,000 before the election.”