The rapid expansion of global monetary liquidity, currently growing at a rate exceeding 6% annually, represents the swiftest surge since April 2022. This surge is expected to have an impact on Bitcoin [BTC].
The upward trajectory aligns with a four-year cycle akin to what was observed in April 2020. This increase in liquidity is poised to elevate the prices of risk assets, including Bitcoin, in the medium term.
Major central banks such as the Federal Reserve and the European Central Bank are anticipated to introduce interest rate cuts in the forthcoming weeks, signaling the commencement of a worldwide easing phase.
Nevertheless, immediate obstacles persist, particularly amid the ongoing “adverse Fed liquidity environment” and the potential strengthening of the USD.
The ensuing weeks may unveil auspicious opportunities, particularly for Bitcoin.
BTC’s Formation of Cup & Handle Pattern
The surge in global liquidity is poised to significantly influence Bitcoin’s valuation. Bitcoin is in the process of shaping an extensive cup-and-handle pattern, with an expected breakout around mid-September, potentially during or after the Federal Reserve’s meeting.
This development could incite a substantial upsurge, signaling the commencement of what experts are labeling the 2024-2025 Bitcoin bull market. Investors are advised to retain their BTC holdings and brace themselves for this upward momentum.
If Bitcoin breaches its All-Time High (ATH), the value might surge towards $100,000, particularly in the scenario of political events like a Trump victory materializing, as some analysts have suggested.
In the event of BTC facing resistance near its ATH, further analysis will be required by analysts, although the general bias remains optimistic.
Long-Term Holder Supply of Bitcoin
Another positive signal is the nearing of a new ATH in the supply held by long-term Bitcoin holders.
Until the time of writing, long-term holders have retained 16.13 million BTC for over 155 days, with the previous ATH recorded at 16.29 million BTC in December 2023.
This pronounced accumulation by long-term holders, inclusive of institutions, indicates a sustained commitment from key stakeholders, reinforcing the probability of BTC ascending further in the ensuing months.
Bitcoin Volatility and Funding Rates
Bitcoin’s volatility levels have returned to levels close to the cycle peaks, which could be viewed as both positive and negative by traders.
While leveraged traders may encounter challenges, prolonged holders perceive this to be a promising indicator of impending price fluctuations.
Although volatility levels are lower compared to 2021, it is likely to escalate as institutional participants rejoin the market.
The Funding Rates for Bitcoin have remained bullish for more than a year, reinforcing the expectations of a substantial price escalation.
The Bullish sentiment has dominated the Futures market for 381 days. The ongoing surge in global liquidity is expected to continue propelling Bitcoin’s valuation upwards in the near future.