Over the past five days, Bitcoin has undergone a corrective pullback after a rapid surge from approximately $66,800 to $99,690—just shy of the psychological $100,000** milestone. The price retreated by **8%** to **$90,835.50, followed by a 4.22% rebound marked by a bullish engulfing candlestick—a notable reversal indicator.
Analyst Joe Consorti suggests Bitcoin's trajectory may hinge on the Global M2 money supply, projecting a potential 20-25% correction toward sub-$70,000 levels.
How Bitcoin’s Price Correlates with Global M2
Joe Consorti’s analysis reveals a 70-day lagged correlation between Bitcoin’s price and Global M2 (worldwide money supply):
- Expansion in M2: Typically precedes Bitcoin rallies ~70 days later.
- Contraction in M2: Often foreshadows Bitcoin downturns.
"If this correlation holds, Bitcoin could face a significant correction," Consorti warns.
(Source: @JoeConsorti)
Critics highlight potential flaws:
- Custom scaling may force artificial alignment.
- Macro factors alone overlook sentiment, institutional flows, and tech developments.
Technical Analysis: Key Levels to Watch
Support Zones
- EMA 20 ($90,413.50): Dynamic support in uptrends.
- Fair Value Gap ($81,651–$85,205): Confluent with EMA 50 and Fibonacci 0.5 retracement.
- **EMA 100 ($73,785.50)**: Aligns with Global M2’s sub-$70K projection.
Resistance
- 0.618 Fibonacci Level ($96,326.80): Rejected recent rebound, reinforcing bearish pressure.
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Historical Performance of the Global M2 Correlation
When It Worked
| Period | M2 Movement | Bitcoin’s Lagged Reaction (70 Days) |
|---|---|---|
| Jan–Mar 2023 | Increased | Rally in March 2023 |
| Jun–Aug 2023 | Decreased | Decline in August 2023 |
When It Failed
| Period | M2 Movement | Bitcoin’s Anomaly |
|---|---|---|
| Sep–Dec 2022 | Steady Growth | Price Stagnation |
| May–Jul 2023 | Sharp Rise | No Significant Movement |
FAQs: Addressing Key Concerns
Q: How reliable is the Global M2 correlation?
A: Mixed track record—effective in some cycles but disrupted by external factors like ETF approvals or regulatory shifts.
Q: What’s the worst-case scenario if M2 trends downward?
A: A drop to $70,000–$73,785 (EMA 100) is plausible, offering a potential accumulation zone.
Q: Should traders rely solely on M2 data?
A: No. Combine with on-chain metrics (e.g., NUPL, SOPR) and technical levels for robust analysis.
👉 Dive deeper into Bitcoin’s macro indicators
Final Takeaways
Bitcoin’s short-term direction hinges on:
- Holding EMA 20 support near $90,400.
- The validity of the Global M2 lagged correlation.
- Broader market sentiment amid institutional inflows.
Always cross-verify macro trends with technicals to navigate volatility effectively.
DISCLAIMER: This analysis is for educational purposes only. Trading carries risks—conduct independent research before investing.