Bitcoin liquidity index points to $110K local BTC top by January 2025

2024-12-02 08:29:08 Primitive Reading

From cointelegraph by Zoltan Vardai

Bitcoin has entered the “parabolic phase” of the market cycle, as analysts point at a local top of above $110,000 before the end of January.

Bitcoin price BTC$96,959 could rise above $110,000 before the end of January based on its correlation with the Global Macro Investor’s Total Liquidity Index, which offers an aggregate view of all major central bank balance sheets.

The $110,000 price tag is just a “local top” for the current Bitcoin cycle, wrote Raoul Pal, founder and CEO of Global Macro Investor, in a Nov. 29 X post:

“There have been a lot of imitations of this chart going around with the wrong phasing. Here is the updated original from our work at Global Macro Investor.”

GMI Total Liquidity Index, Bitcoin (RHS). Source: Raoul Pal

Provided that Bitcoin price follows the liquidity index, Bitcoin’s right-hand side (RHS), which marks the lowest bid price someone is willing to sell the currency for, will peak near $110,000 in Jan. 2025 before falling below $70,000 by Feb. 2025.

Related: Bitcoin was pronounced dead 415 times, now it battles for $100K

Growing M2 money supply to fuel Bitcoin’s 2025 rally

The potential correction below $70,000 will only be temporary due to what Pal called an “interim peak in liquidity,” which he expects to continue rising into the third quarter of 2025.

The growing money supply is a historic catalyst for Bitcoin price, according to Alvin Kan, chief operating officer of Bitget Wallet. He told Cointelegraph:

“The increase in liquidity from the Fed typically enhances market conditions for risk assets like Bitcoin. Historically, such liquidity injections have led to increased investor interest and capital inflows into cryptocurrencies.”

Other analysts expect global liquidity to peak at the end of January 2026.

Based on historical data, Bitcoin could be set to absorb up to 10% of the newly printed money supply. This may attract $2 trillion worth of new investment into Bitcoin during 2025, based on a predicted $20 trillion liquidity increase.

Disclaimer: This specification is preliminary and is subject to change at any time without notice. Amazon Finance assumes no responsibility for any errors contained herein.