Global markets witness a liquidity surge projecting an optimistic second quarter in 2025. Will the liquidity spike drive a similar bullish spree in crypto markets and pump the BTC price once again?
By Vishal Dixit
Edited by Marco T. Lanz
Updated
3 mins read
Bitcoin BTC $93 283 24h volatility: 0.7% Market cap: $1.85 T Vol. 24h: $28.01 B is trading at a discount of nearly 25% from its all-time high of $109,350. Currently, Bitcoin holds a market cap of $1.61 Trillion while the crypto market is down at $2.66 Trillion.
Amid the declining trend, rising Fear, Uncertainty, and Doubt (FUD) sentiments warn a major crash ahead. However, will rising liquidity in the global market favour a trend reversal for the crypto market?
Amid the increased liquidations, the declining trend over the past few weeks has resulted in a massive surge of fear in the crypto market. The fear and greed index in the crypto market has plunged to extreme fear at a value of 10.
This marks a sudden shift in market sentiments over the past two months.
Despite the possibility of a bullish comeback, the current conditions for Bitcoin are extremely bearish. The liquidations in the crypto market are close to reaching a billion dollars over the past 24 hours.
Currently, the 24-hour liquidations stand at $993.16 million, with the long liquidations accounting for $818.16 million. The short liquidations are limited to $174 million in the past 24 hours.
Bitcoin, specifically, has witnessed a total liquidation of $491.68 million. Out of the total liquidation, long liquidations account for $415.09 million, while short liquidations are at $76.59 million.
Raoul Paul, the CEO of Real Vision, highlights an astonishing relationship between the global M2 money supply and Bitcoin price movement. As per his latest X post, the Bitcoin price movement is strongly influenced by the Global M2 line, with a lag of approximately 10 weeks.
I will put out a Flash Update video later today with more details but the Global M2 vs BTC chart has largely played out now. Patience.
Volatility is the price you pay for the returns… pic.twitter.com/0OjqQ2TDJ1
— Raoul Pal (@RaoulGMI) February 28, 2025
As per the chart, Bitcoin price movement witnesses strong influence from the Global M2 supply line. With a surge in M2 supply, the Bitcoin price is likely to witness a bullish surge. However, the 10-week lag acts as a buffer phase.
The ongoing Bitcoin price fall correlates with the M2 money supply line declining from $108 trillion to nearly $104 trillion in early 2025. With the 10-week lag, the Bitcoin price correction was overdue. However, the M2 supply line has bounced back recently to nearly $107 trillion. Hence, the Bitcoin price is likely to undergo a consolidation phase similar to the M2 line before a bullish comeback.
The Global M2 Money Supply refers to the total amount of available money circulating in the global economy. This includes both liquid cash and easily accessible highly liquid financial assets. The M2 Money Supply is a key indicator of the financial content of the broader market and global liquidity.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
