Bitcoin $90,000 Price Target Supported by China’s Rising M2 Money Supply

Analysts forecast Bitcoin’s price may reach $90,000, spurred by China’s increasing M2 money supply, which has hit a record $326.13 trillion. This growth in liquidity typically indicates heightened investment in risk assets, including cryptocurrencies. However, macroeconomic factors and geopolitical tensions pose potential risks to achieving this target. The correlation between M2 increases and cryptocurrency price surges, along with recent ETF developments, signals cautious optimism in the market.

In the latest US Morning Crypto News Briefing, analysts reveal that Bitcoin’s price target is set at $90,000 due to a surge in China’s M2 money supply, which has reached a record $326.13 trillion. Increased M2 indicates greater liquidity in financial systems, leading to heightened investment in risk assets, including cryptocurrencies. This correlation historically results in bullish trends for Bitcoin and altcoins.

Analyst Kong Trading emphasised that with China’s M2 surpassing 326 trillion, a significant rise in risk assets is expected. Furthermore, data from BGeometrics shows a similar increase in global M2, reinforcing analysts’ predictions of an imminent upside for Bitcoin. According to Brickken’s market analyst Enmanuel Cardozo D’Armas, Bitcoin is poised to retest $90,000, especially if M2 continues to rise.

M2 growth may prompt more Chinese investors to turn towards riskier assets like cryptocurrencies, suggesting a favourable shift in investment sentiment as institutional attitudes evolve. Cardozo D’Armas notes that the $90,000 resistance is a crucial target for Bitcoin, which must be surpassed before aiming for the $100,000 level. However, the fulfilment of this prediction is uncertain, influenced by macroeconomic factors.

Potential market disruptions include Federal Reserve interest rate decisions and geopolitical tensions surrounding trade with China. Concerns over regulatory actions in crypto markets may also impact investment behaviours, prompting some investors to adopt a cautious stance until clearer signals emerge.

Additionally, there have been reports of China liquidating seized cryptocurrencies to support local government finances amid ongoing economic issues. Cardozo D’Armas advised that while the M2 increase is essential for Bitcoin’s upward momentum, it is only one of many factors influencing the crypto market.

Visual data indicates a historical trend where M2 increases correlate with price surges in major cryptocurrencies. Notably, a recent chart illustrates that liquidity expansion often precedes altcoin price increases. With Bitcoin ETFs seeing significant inflows, investor confidence is on the rise. Meanwhile, developments in Ethereum ETF approvals and new initiatives like Circle’s Refund Protocol signal a maturing market characterized by enhanced transparency and liquidity. Various other factors, including option expirations and strategic moves by crypto firms, will also shape market dynamics leading into the future.