Bitcoin’s price falls to $62K as Bitcoin investors place their bets on the M2 money supply.
Bitcoin Aims for $62,000 Amid Market Volatility and Stock Sell-Off
Bitcoin’s price falls to $62K as Bitcoin investors place their bets on the M2 money supply. On August 3, Bitcoin (BTCUSD) attempted to regain the $62,000 mark as the broader market showed modest gains following a recent wave of liquidations.
Bitcoin Rebounds from Recent Lows
Data from Cointelegraph Markets Pro and TradingView revealed a 3% rebound in Bitcoin’s price, recovering from recent multi-week lows of $60,435 on Bitstamp. This rebound came amidst a challenging day for global stock markets, with the Nikkei experiencing a significant 6% drop, foreshadowing potential losses on Wall Street. Additionally, disappointing U.S. employment data intensified market anxiety.
Bitcoin experienced a sharp decline of nearly $5,000, breaking through several key support levels, including the short-term holder cost basis. The resulting liquidations were substantial, with CoinGlass reporting a total wipeout of $230 million in crypto longs over August 1 and 2.
Market Reactions and Federal Reserve Speculation
Michaël van de Poppe, founder and CEO of MNTrading, noted on X, “Yields are falling off a cliff in the U.S. markets as job reports came in astonishingly bad. There’s a slight panic, as markets are pricing in a significant U.S. recession.” He suggested that these conditions might increase the likelihood of the Federal Reserve implementing interest rate cuts in its September meeting, which could serve as a bullish signal for crypto and risk assets.
Anticipations of Rate Cuts and Economic Uncertainty
The Kobeissi Letter provided an overview of the current macroeconomic signals, highlighting the shift in focus from whether the Fed would cut rates in September to the potential magnitude of the cut, with market odds favoring a smaller 0.25% reduction at 78%, according to CME Group’s FedWatch Tool.
Bullish Outlook for Bitcoin Amid Increased Global Liquidity
Despite the recent market turmoil, bullish perspectives on Bitcoin persist. Jeff Ross, founder and managing director of Vailshire Partners, pointed to rising global liquidity as a potential driver for Bitcoin’s future price movements. Ross shared a chart on X comparing global M2 money supply with Bitcoin’s price and its 50-week and 200-week simple moving averages (SMAs), suggesting that a reverse head-and-shoulders pattern on the weekly chart, combined with increasing global M2 liquidity, could be very bullish for Bitcoin.
Long-Term Trading Range and Future Expectations
Before the recent decline, Cointelegraph had reported growing trader expectations that Bitcoin would revisit the lower end of its long-term trading range. Popular trader Daan Crypto Trades noted, “Bitcoin has been trading within this range for over 5 months. We’ve observed lower lows and lower highs throughout this period. Key levels to watch are $59K and $74K for the lows and highs.”
Disclaimer
This article does not provide investment advice or recommendations. All investments and trading activities involve risks, and readers should conduct their own research before making any decisions.
