BTCUSDT/M2 - The Beginning of the End?
BTC has had an extended bullish push up from the March 2020 "Black Swan" lows and by most metrics this recent sell-off looks like just another one of its large corrections the crypto is known for.
As many have noted, throughout the covid crisis most world economies have been printing money like there's no tomorrow nor consequences of doing so (insert "money printer go brrrr" meme here). So, we have hugely over-inflated fiat currencies (most notably the US dollar) and crypto currencies (USDT supply at ATH), and a surplus of money to be injecting in to the market following massive bailouts of corporations - pumping up prices and giving us all the illusion of safety. Looking at traditional markets' indices, the SPX500USD & NAS100USD have both recaptured and soared past their previous all-time-highs when not accounting for the M2 money supply.
However, what story do these charts tell us when we do take the M2 supply into account? Looking at BTCUSDT in particular, we can see that we had a clean break of the bearish market structure line in November last year and despite the 170% pump we've seen this year, we've failed to push above the weekly bullish market structure and have instead rejected the key resistance point of the quarterly premium taken from June '19 highs to March '20 lows. We are now creating a series of lower highs and lower-lows after having broken the 3-day bearish market structure at these key levels - indicating further long-term bearish price action if we fail to recapture above the 12060 level.
Could this year's pump have simply been a return to a key liquidity level for smart money to have taken their exit positions? It's certainly starting to look that way.
As many have noted, throughout the covid crisis most world economies have been printing money like there's no tomorrow nor consequences of doing so (insert "money printer go brrrr" meme here). So, we have hugely over-inflated fiat currencies (most notably the US dollar) and crypto currencies (USDT supply at ATH), and a surplus of money to be injecting in to the market following massive bailouts of corporations - pumping up prices and giving us all the illusion of safety. Looking at traditional markets' indices, the SPX500USD & NAS100USD have both recaptured and soared past their previous all-time-highs when not accounting for the M2 money supply.
However, what story do these charts tell us when we do take the M2 supply into account? Looking at BTCUSDT in particular, we can see that we had a clean break of the bearish market structure line in November last year and despite the 170% pump we've seen this year, we've failed to push above the weekly bullish market structure and have instead rejected the key resistance point of the quarterly premium taken from June '19 highs to March '20 lows. We are now creating a series of lower highs and lower-lows after having broken the 3-day bearish market structure at these key levels - indicating further long-term bearish price action if we fail to recapture above the 12060 level.
Could this year's pump have simply been a return to a key liquidity level for smart money to have taken their exit positions? It's certainly starting to look that way.
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