Bitcoin

Three factors will fuel Bitcoin’s breakout: falling dollar, rising debt and M2 money supply – analyst

Published

11 months ago

19 May, 2024

Three factors will fuel Bitcoin’s breakout: falling dollar, rising debt and M2 money supply – analyst

(Kitco News) – When analysts try to predict how Bitcoin (Bitcoin) will perform in the future, most analyze price action and use technical indicators such as RSI and Fibonacci retracement levels. Others focus on fundamental indicators such as the Bitcoin halving, circulating supply and network hashrate.

For Jamie Coutts, chief crypto analyst at Real Vision, the best indicators of Bitcoin’s future performance are the M2 money supply and the performance of the US dollar (USD) index (DXY), which measures the value of the dollar compared to a basket of six dominant global currencies.

“The Global Money Supply index tracks M2 monetary aggregates from 12 of the world’s largest economies, all in US dollars,” Coutts he said at X. “In our fiat, credit-based financial system, the money supply generally moves in one direction. Significant drops, like in 2022, are rare and typically brief.”

“There is currently a sea of red on my macro and liquidity dashboard,” he noted. “But signs are emerging that this is about to change. Global M2 is currently neutral and holds the key to the next stage of the cycle.”

Coutts said that of the three main measures he tracks in his “Bitcoin/Liquidity framework” – central bank balance sheets, Global M2 and DXY – “Global M2 appears to capture most of the movement.”

“The rate of change in the money supply is more important than the nominal value,” he said. “The chart confirms what our MSI performance chart suggests: Bitcoin generally moves with changes in M2 momentum.”

Coutts noted that momentum is currently “slow” for the MSI global money supply indicator “despite being in an uptrend,” and said that for “there to be a break from the 2.5-year monetary tightening pattern and a signal bullish MSI, momentum needs to increase.”

He highlighted three factors that, when combined, could help achieve this objective: “dollar depreciation, credit expansion and increased public debt issuance”.

“Improving credit conditions is critical,” said Coutts. “US M2 is about to turn positive on a 12-month basis for the first time since the start of 2021. This could prompt more countries to follow suit in the coming months.”

He added that “corporate bond spreads (BBB/Baa) versus the 10-year US Treasury yield are crucial for monitoring credit conditions” and said: “These spreads have aligned closely with key Bitcoin cycle inflections in the last five years.”

“The chart shows notable changes in corporate bond spread trends, marking Bitcoin’s 2021 peak and 2022 trough,” he noted. “The red and green lines indicate negative and positive trend reversals, coinciding with the ups and downs of the Bitcoin cycle.”

Coutts said there are currently “no immediate concerns as corporate spreads are narrowing,” indicating that “companies are issuing and rolling over debt despite high interest rates arising from record hikes in 2022 and 2023.”

“Using the chameleon trend indicator [chart above] on the corporate spread index provides a clear strategy: buy Bitcoin when the index shows [a] downtrend (red) and stay alert for possible trend reversals (turning green),” he said.

As far as DXY is concerned, Coutts noted that “the dollar is in a range.” He suggested that a break below 101 “would be rocket fuel for Bitcoin.”

Another tailwind for King Crypto is US government debt, which “is unlikely to improve unless fiscally responsible conservatives take control of Congress,” he said. “Unlikely. Moar’s deficit spending is on the way.”

“While my framework needs 2/3 of MSI indicators to turn bullish for macro headwinds to turn into tailwinds, Bitcoin price action will likely detect this macro inflection before most indicators react,” he concluded Coutts. “It better not fade if it breaks above ATHs.”

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a request to carry out any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.

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We are the editorial team of SatoshiTimes, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on SatoshiTimes, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Bitcoin

What to watch for in the markets

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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