Bitcoin Poised to Extend Current Uptrend Thanks to Record Increase in Liquidity

Bitcoin is poised to extend its current uptrend thanks to a record increase in global liquidity.

A new analysis released June 5 by Philip Swift, founder of on-chain data platform LookIntoBitcoin, shows that global liquidity is approaching $100 trillion.

World Liquidity Record Requires Simulated BTC Price Movement

The Bitcoin (BTC) and cryptocurrency markets are known to be sensitive to global liquidity trends, and in 2024, conditions could not be more favorable for Bitcoin prices to rise.

This is the conclusion reached by Swift, whose platform tracks the global M2 money supply and compares it to the behavior of the Bitcoin price.

In US dollars, M2 now stands at $94 trillion – more than ever and $3 trillion more than when Bitcoin reached its all-time high of $69,000 in late 2021.

Since hitting a local low of $85 trillion in late 2022 – coinciding with a bear market in cryptocurrencies – M2 has rebounded 10%.

“The most important chart in this uptrend has reached a new all-time high,” Swift wrote in part of the commentary accompanying X.

“Are you ready?”

Global liquidity Bitcoin vs M2. Source: Philippe Swift

The data is consistent with other recent findings on liquidity, which also draw optimistic conclusions about the direction Bitcoin is heading.

The BTC vs US M1 money supply is emerging from a seven-year period of consolidation – the longest in Bitcoin history – with serious bullish implications as a result.

Copy the Bitcoin Investor Trend in 2020

As financial conditions ease, additional analysis indicates an increased appetite among institutional investors for cryptocurrencies and risk assets.

Related: Bitcoin ETFs Worldwide Take Spotlight As BTC Price Surpasses $71,000

In the latest “weekly report” sent to Cointelegraph, on-chain analytics platform CryptoQuant drew comparisons to investor behavior in 2020.

“In fact, major investors are adding around $1 billion to Bitcoin, as in 2020, before going from $10,000 to $70,000. In 2020, Bitcoin was worth around $10,000 for 6 months with high on-chain activity, which later turned out to be over-the-counter transactions.

“Now, despite lower price volatility, on-chain activity remains high, with $1 billion added daily by new whale wallets, most likely in the form of Bitcoin purchases from institutional investors entering custody portfolios.”

Bitcoin’s new whale entity has reached maximum comparison (screenshot). Source: Cryptoquant

The attached table compares the total base cost, also known as realized price, for new whales from 2020 to 2024.

Likewise, Cryptoquant highlighted growing inflows into U.S. Bitcoin spot exchange-traded funds, or ETFs, which saw the second-highest net inflows on June 4.

US Bitcoin Holdings ETFs (screenshot). Source: Cryptoquant

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.

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