Bitcoin News Today: China's M2 Surge Fuels Bitcoin's Bullish Momentum

Bitcoin price movements have recently shown a heightened correlation with global liquidity trends, particularly those driven by monetary developments in China. New data highlights that China’s M2 money supply has expanded by approximately 4% over the past three months, with a notable $98 billion in liquidity injected this week alone, according to reports from @MilkRoadDaily. This liquidity injection is part of broader global monetary trends, where aggregate global M2 has also increased, creating a backdrop historically linked to upward price momentum in Bitcoin (BTC). Analysts and traders are now watching these metrics closely, as they may signal renewed buying pressure in the cryptocurrency market [1].

The relationship between M2 growth and Bitcoin price action is supported by historical patterns. For example, in the wake of expansive monetary policies such as post-2020 stimulus measures, Bitcoin saw significant price appreciation, rising from under $10,000 to over $60,000 within months. Today, the injection of liquidity by the People's Bank of China (PBoC) is being viewed in a similar context, with traders observing that Bitcoin's beta to global liquidity appears to be turning constructive. If BTC holds above key resistance levels and sees increased trading volumes, it could potentially break out into a new upward trend [1].

A recent report by Alphractal further reinforces this liquidity-driven narrative. The firm noted that Bitcoin typically trends upward when China’s M2 money supply outpaces that of the United States. As of the latest data, China's M2 stands at 329.94 trillion yuan, an 8.78% increase from last year, while the U.S. M2 is at $22.02 trillion, up 4.53% year-over-year. This shift in monetary dominance is being interpreted as a positive signal for BTC, as it suggests a more accommodative global liquidity environment. Alphractal's analysis also highlights that Bitcoin's price has already responded favorably to these liquidity injections, particularly in the past few weeks [2].

From a trading perspective, the current environment presents several strategic opportunities for market participants. With BTC trading near key support levels, the recent liquidity injection could serve as a catalyst for a breakout. On-chain metrics, such as rising Bitcoin wallet addresses and transaction volumes, also support this bullish setup. Technical indicators, including the RSI, are showing signs of potential upward reversal, while institutional flows continue to show strength. For instance, spot BTC ETF inflows have exceeded $1 billion in the past month, suggesting sustained interest from institutional investors [1].

However, the broader implications extend beyond Bitcoin. If China's liquidity measures continue to ease global economic pressures, related cryptocurrencies—such as Ethereum (ETH) and Solana (SOL)—could experience secondary price appreciation. That said, risks remain, particularly if inflationary pressures emerge from excessive liquidity, prompting central banks to reverse course. Traders are advised to monitor key economic indicators, such as U.S. CPI figures, for signs of inflationary overheating. In the immediate term, however, the data supports the thesis that Bitcoin may continue to benefit from global liquidity expansion and the relative easing of monetary conditions in China [1].

Source:

[1] Global M2 Rises ~4% in 3 Months, China Adds $98B Liquidity This Week: Bitcoin BTC Correlation in Focus (https://blockchain.news/flashnews/global-m2-rises-4-in-3-months-china-adds-98b-liquidity-this-week-bitcoin-btc-correlation-in-focus)

[2] Analytics Firm Reveals Obscure Metric: “Bitcoin Price Moves Up and Down Based on This Data from China” (https://en.bitcoinsistemi.com/analytics-firm-reveals-obscure-metric-bitcoin-price-moves-up-and-down-based-on-this-data-from-china/)