NewsletterCrypto Market Rally: Bitcoin and Altcoins Follow Global M2 Before US CPI
Highlights
- Bitcoin leads crypto market rally with 4% upside closely following the trajectory of the global M2 money supply.
- M2 liquidity, favorable macro conditions, $1 billion USDT minting on Tron could serve as major catalysts.
- Trump Account initiative and Fed rate cuts have further fueled market enthusiasm in altcoins.
- Arthur Hayes predicts that Bank of Japan may pivot to QE soon.
Crypto market has staged a strong upside today with Bitcoin (BTC) price shooting 4% to $109,500 levels, and preparing for new all-time highs and price discovery soon. Latest data shows that BTC has been closely following the M2 Money supply, and its next stop could be to $125,000.
Altcoins, too, have joined the party as Ethereum (ETH) registered 7% gains, while Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) are up 5% each. The Trump account announcement, Fed rate cut expectations, etc. have served as additional catalysts.
Crypto Market Rallies As BTC Follows Global M2
Ahead of the US CPI data release on Wednesday, Bitcoin price is showing strength backed by a strong technical setup and macroeconomic factors. As a result, BTC is now looking to enter the price discovery zone by following the global M2 money supply.
Global M2 money supply has been on a consistent upward trajectory, with U.S. M2 recently reaching record levels. This surge in liquidity has provided favorable conditions for bullish momentum in the crypto market. As shown in the chart below, as of June 5, BTC prices have been aligning with M2 trends.
As per the above image, there’s a 71-day offset chart between Bitcoin and M2 supply, which shows that BTC price action is supported by macroeconomic liquidity trends. Additionally, the $1 billion USDT minting on Tron blockchain could prove to be a liquidity boost for hitting a new Bitcoin all-time high.
Arthur Hayes Thinks Bank of Japan Could Announce Rate Cuts Soon
Former BitMEX CEO Arthur Hayes has hinted that crypto market rally can continue further if the Bank of Japan (BoJ) pivots towards quantitative easing (QE). So far, the BoJ has held a firm stand that inflation is still above its desired target.
Hayes speculated that ordinary Japanese citizens might not favor such a move but noted that if the BOJ delays quantitative tightening (QT) and resumes selective quantitative easing (QE) during its June meeting, risk assets could experience a significant boost.
Bitcoin Dominance Is Growing, But Altcoin Season In the Making?
Observers note that Bitcoin dominance is currently forming a rising wedge pattern, approaching its peak, a technical setup often signaling a reversal or breakout. The shift, anticipated within the next three months, could see capital flow away from Bitcoin and into altcoins.
Investors and traders are closely monitoring the market dynamics, looking for confirmation of the predicted trend reversal.
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