Bitcoin News Today: Bitcoin in Sideways Trade Awaits M2 Liquidity Catalyst

Bitcoin's price remains in a consolidation phase as buyers and sellers appear to be in a temporary stalemate. According to analysis from Negentropic, the X account operated by Glassnode co-founders Yann Allemann and Jan Happel, the market is currently in a state of equilibrium where sellers have exhausted their available supply and buyers are largely inactive [1]. This dynamic has resulted in a sideways trading pattern, with no clear direction for the Bitcoin price in the near term. Without fresh capital entering the market, the status quo is likely to persist until an external catalyst emerges [1].

The anticipated catalyst, however, may come from outside the crypto market itself—specifically from changes in global liquidity, with a focus on the M2 money supply [1]. M2 represents the total amount of money in circulation, including cash, checking deposits, and near money assets. Historically, shifts in M2 have been linked to movements in Bitcoin price, with increases in liquidity often leading to higher prices, albeit with some lag [1].

According to Negentropic, M2 liquidity is expected to begin rising in approximately four days from the date of their analysis, which could signal a shift in the current market equilibrium [1]. This anticipated increase aligns with historical patterns where rising M2 has preceded bullish movements in Bitcoin. Data from the Federal Reserve Economic Data (FRED) shows that M2 peaked at 22,055.1 on April 14 and stood at 22,005.4 as of July 30, indicating a slight decline [1]. A reversal in this trend could provide the necessary capital inflow to drive the next significant move in Bitcoin price.

Investors are being encouraged to closely monitor M2 money supply data as a key indicator of broader capital flows and potential market direction [1]. An increase in global liquidity typically signals more available investment capital, which may find its way into riskier assets like Bitcoin, further supporting a potential upward trend in the BTC price. As such, tracking developments in M2 becomes an essential component of strategic decision-making in the crypto space.

The key takeaway is that Bitcoin’s price is currently in a holding pattern, awaiting a major external influence—namely, a change in global liquidity—to determine the next major direction of the BTC trend. With M2 expected to rise in the near future, the stage may be set for a renewed push in Bitcoin price. By maintaining close attention to macroeconomic indicators like M2, investors can better anticipate and navigate the evolving crypto market.

Source: [1] Bitcoin Price: Global Liquidity Poised to Ignite Next Massive Move (https://coinmarketcap.com/community/articles/68932411320e3f0b1f75b8fd/)