Investors have worried about Bitcoin’s struggles recently, as analysts predicted a drop in the Bitcoint’s price by 20 – 25 per cent because of the global M2 money supply curtailment.
Bitcoin is down nearly 9 percent from its recent high at $92,864 this morning. This decline is explained by the fact that long term holders (LTHs) have been taking their profits and are selling 366k BTC in the past month, which is the highest monthly number since April 2024.
Crypto analyst Joe Consorti tweeted that Bitcoin price trend matches M2 money supply change with a 70 day lag. When M2 hits a massive dive, Bitcoin may fall, hitting major support levels at $88,000 and then sill lower to $80,000.
Bitcoin Struggles Near $94,000
A deep correction is fueling speculation that Bitcoin cannot sustain levels above $94,000. Market data shows the probability of the cryptocurrency hitting the $100,000 milestone in year’s end is actually a healthy 64 percent compared to 92 percent rate of success at the time of its bull run back in January.
According to recent Glassnode figures, LTH activity is at its peak, with over 507,000 BTC being sold since September 2023. Investors are leaving a trail of profits as they lock in profits around an increasingly uncertain market.
BTC Realised Profit/Loss (P/L) ratio has hit historic highs, adding to the bearish sentiment, and potentially a market overheating. Significant profit taking can further erode upward momentum and liquidity which is shown by Elevated P/L ratios.
These factors — shrinking M2 supply, profit taking by LTHs, weakening liquidity — could put BTC prices on a downward course over the next weeks, say analysts. But many experts think a correction will let the market stabilize at lower levels so future growth can begin.
For BTC, this turbulent period is uncertain. But for how long it can weather the storm and beat down further corrections depends on how the global liquidity trends and market sentiment will turn out in the months to come.
