- Kyle Chassé identifies Bitcoin price correlation with global M2 money supply.
- The analysis suggests a three-month gap between Bitcoin rallies and monetary expansion.
- Current M2 growth above $111 trillion suggests continued Bitcoin strength.
Bitcoin has maintained consolidation between $108,000 and $110,000 over recent days, even though it dropped to $106,000 now. Market analyst Kyle Chassé suggests this period may precede a larger move based on Bitcoin’s historical relationship with global monetary trends.
In a thorough research, Chassé emphasized the daily price fluctuations of Bitcoin in relation to the global M2 money supply, which includes cash, checking accounts, and near-money assets globally. By applying a 90-day offset to M2 data, his analysis shows that the price of BTC lags behind global liquidity trends by almost three months.
This correlation becomes apparent when examining Bitcoin’s price history against monetary expansion cycles. The cryptocurrency peaked above $109,000 in January before dropping below $75,000 in early April.
Chassé projects Bitcoin could eventually reach $400,000 based on this correlation pattern. Achieving this target would require approximately 270% growth from current levels near $108,000, a scenario he considers plausible if global M2 expansion continues at current rates.
12-week leading Bitcoin indicator confirms pattern
Supporting this thesis, Julien Bittel from Global Macro Investor has documented similar findings. According to his study, over the past two years, liquidity gains have often come approximately three months ahead of Bitcoin rallies, with worldwide M2 serving as a 12-week leading signal for price fluctuations.
Global M2 increased from $98 trillion to little over $108 trillion between early 2023 and early 2024. This increase was reflected in the price of bitcoin, which by late 2024 had risen past $100,000. BTC’s range-bound behavior and subsequent decline below $80,000 corresponded with a slowdown in M2 growth in the middle of 2024, which was consistent with a more general stall in global liquidity.
The recent surge in global M2 above $111 trillion, combined with the established 90-day lag pattern, indicates BTC could see continued upward pressure through the coming months. This monetary backdrop provides fundamental support for Bitcoin’s price action beyond technical analysis alone.
However, the correlation model also suggests Bitcoin remains vulnerable to changes in global monetary policy. If central banks begin contracting money supply or slowing expansion rates, BTC could face headwinds after the typical three-month delay period.
