- Analysts are predicting that BTC could rise after the U.S. money supply saw a record increase.
- However, short positions against BTC have been increasing sharply, raising concerns of a price correction.
Bitcoin [BTC] The price has been stuck in a consolidation range between $60,000 and $70,000 for several weeks, creating a tedious situation for speculators who profit from volatility.
This sideways movement continued following the halving event in April and seemingly “stagnant” demand from the US spot BTC ETF.
However, a new theory has emerged about the king coin: an increase in the US money supply.
Bitcoin’s Future Path
According to X user (formerly Twitter): Technology Development_52The entrepreneur and crypto analyst noted that BTC could be on the verge of a “crash” after BTC-to-M1 liquidity hit an all-time high.
“$BTC was never supposed to hit new highs in 2021. M1 surged to record highs but #bitcoin couldn’t compete. Now that we’ve surpassed the 2M year supertrend, we’re on the verge of that surge that has always been signaled.”
Source: X/TechDev_52
The analyst blamed the lack of an “explosion” in 2021 when BTC recorded a similar breakout against the money supply on “M1 liquidity due to the COVID panic.”
For those unfamiliar, M1 liquidity tracks the most liquid portion of the money supply, which includes currency and assets that can be quickly converted into cash. M2 goes further and includes the “less liquid” portion of the money supply, such as savings deposits.
Interestingly, M2 expansion Another analyst, Willy Woo, said it rose 0.7%. In previous cycles, a surge in the money supply led to an increase in BTC’s USD-denominated value.
It remains to be seen whether BTC can break out above the range on M1 liquidity and M2 expansion.
However, recent data shows that leveraged funds have broken records for BTC. Short position. this It could be a hedge against a potential BTC drop or bet on a price correction.
Source: X/ZeroHedge
Meanwhile, after clearing out liquidity at $68.4K, a move towards $70.5K is likely in the short term.
According to data from Coinglass, both levels marked in orange were important liquidity cluster points that could act as magnets for price movement.
Source: Coinglass
