An influential bullish signal for Bitcoin has emerged for the first time in nearly a year, hinting at a potential price breakout. Jamie Coutts, the lead crypto analyst at Real Vision, shared the news on August 15, expressing optimism for Bitcoin’s future price based on his global liquidity model.
Historical Context and Predictions
Coutts pointed out that a similar bullish signal preceded significant rallies for Bitcoin in previous cycles: a 19-fold increase in 2017 and a six-fold rise in 2020. He anticipates that this new signal could lead to a 200-300% increase in Bitcoin’s price, though he emphasized that this is contingent upon the performance of the US Dollar Index (DXY) and global liquidity levels.
“For Bitcoin to meet this target, the DXY needs to remain below 101, driven by sustained central bank interventions. This would push global M2 well above $120 trillion,” Coutts noted.
Short-Term Challenges?
Despite the promising signal, Bitcoin may confront short-term obstacles. A significant $1.4 billion in Bitcoin options are set to expire on August 16, which could pressure the asset’s price if it stays below $60,000.
The rising global M2 money supply could support Bitcoin in surpassing this critical price point. Last month, the Bank of Japan and the People’s Bank of China added substantial amounts to the global monetary base, suggesting a continued expansion due to the fractional reserve system’s nature.
“In a credit-based fractional reserve system, the money supply must expand to avoid collapse,” Coutts explained. However, the inflow of funds into US Bitcoin exchange-traded funds (ETFs) will also play a crucial role in Bitcoin’s price movement.
Actionable Insights for Investors
- Monitor the US Dollar Index (DXY) for levels below 101 as an indicator of potential Bitcoin growth.
- Keep an eye on global M2 money supply trends, particularly central bank injections.
- Be aware of significant Bitcoin options expirations that could impact short-term price movements.
- Track inflows and outflows in US Bitcoin ETFs to gauge market sentiment.
The future of Bitcoin’s price may largely depend on these financial indicators and market dynamics. Investors should remain vigilant and informed to navigate these potential fluctuations effectively.
