BTC price dropped to $62K as Bitcoin bulls bet on M2 money supply
Bitcoin (BTC) sought to reach $62,000 on August 3 as markets rallied after a fresh run of liquidity.
The price of BTC will test $60,000 on the stock sale
According to data from Cointelegraph Markets Pro and TradingView, BTC price rebounded by 3% after hitting a new multi-week low of $60,435 on Bitstamp.
These followed a dismal day for stocks around the world, with the Nikkei's 6% drop setting the scene for further losses on Wall Street. A weaker-than-expected U.S. employment report fueled fears.
Bitcoin itself has lost around $5,000, giving up several key support lines, including a short-term holding cost base.
As a result, liquidity has mounted, with data from CoinGlass monitoring putting the liquidation of crypto longs at $230 million for both August 1st and August 2nd.
“Commodities are falling off a cliff in US markets despite a surprisingly bad jobs report,” Michael van de Pop, founder and CEO of trading firm MNTrading, responded on X.
“Little Panic Across the Board as Markets Are Bearish for US”
Van de Pop said recent events strengthen the likelihood of the Federal Reserve cutting interest rates at its next meeting in September – a key push for crypto and risk assets.
“One thing is certain: September's rate cut is confirmed,” he concluded.
Marketing Input Kobe's letter summarizes the macroeconomic landscape as full of mixed signals.
“Yesterday the discussion was whether the September discount is coming or not. Today, the discussion is whether the rate cut will be 25 basis points from 50 basis points,” explained the latest X cover piece.
Data from the CME Group's FedWatch Tool showed a 0.25% daily drop in market opportunities by 78%.
Global Liquid offers a Bitcoin bull case
Despite the market shock, bullish views on Bitcoin remained in play.
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Jeff Ross, founder and managing director of hedge fund Wilshire Partners, has suggested that increased global liquidity will drive future BTC price action.
Ross uploaded a chart to X comparing the global M2 money supply to BTC/USD and the 50-week and 200-week simple moving averages (SMAs).
“Will an inverse head and shoulders form for bitcoin (on the weekly chart) on global M2 money supply increases? Will be uber bullish from a combined TA and liquidity perspective,” reads part of the accompanying commentary.
Even before the massive pullback, Cointelegraph reported rising expectations among traders that Bitcoin would test the bottom of its long-term trading range.
“Bitcoin has been trading in this range for over 5 months now,” noted trader Dan CryptoTrades said.
We've been seeing lower lows and lower highs as the range unfolds. Key levels remain at $59K and $74K for the low and high levels, respectively.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
