As of now, Bitcoin [BTC] is at a critical juncture in terms of price movement, and analysts are keenly observing its next steps. There appears to be a gap in the price range between $66.8K and $67.1K on Bitcoin’s profile chart, indicating fewer positions.
Traditionally, prices tend to move towards these gaps to fill them before continuing in a particular direction.
The future trajectory of Bitcoin hinges on whether it fills this existing gap before moving upwards or if it retraces further to gather more liquidity.
Bitcoin’s Journey towards a Price Gap
Following its achievement of the significant $70K mark, BTC is experiencing a minor correction in its price action.
This correction could potentially signify Bitcoin gearing up for its next surge, but before that, it might need to address the gap within the $66.8K-$67.1K range.
This specific range is situated beneath a crucial double bottom pattern noted on the 6-hour timeframe for the BTC/USDT pair, reinforcing the possibility of upward movement once the gap is filled.
The weekly chart remains positive, with a break in structure towards the upside, indicating solid market backing.
Traders are closely monitoring these developments, with many expecting Bitcoin to hold steady between $70K and $71K, which could lead to a foray into price discovery and set a new all-time high.
Filling the gap within this price band could also serve as a liquidity boost, empowering Bitcoin to gather strength before embarking on a substantial upward move.
A successful breach past $70K would signify the initiation of a fresh bullish phase, possibly propelling Bitcoin into unexplored price realms.
Profitability and Global M2 Money Supply
The Bitcoin Average Profitability Index backs this projected outlook. Presently, the index stands at 202%, indicating that the current price is more than twice the realized price.
Based on past trends, investors typically start to cash in profits when this index surpasses 300%, but currently, indications suggest that the market hasn’t shifted towards heavy profit-taking mode yet.
This scenario leaves room for BTC to sustain its upward movement post-gap filling, with long-term holders continuing to hold a positive outlook for higher price levels.
Additionally, insights from the Global M2 money supply data shed light on Bitcoin’s broader potential.
In previous bullish cycles like the one in 2016-2017, the expansion of M2 supply coincided with substantial Bitcoin price appreciation.
In 2021, a similar expansion took place, but external factors such as the FTX collapse and rising interest rates hindered Bitcoin’s momentum.
If the M2 supply continues its growth as some analysts predict until mid-2026, this could inject additional liquidity into the market, extending Bitcoin’s ongoing cycle. Bitcoin’s path appears optimistic, with the price gap serving as short-term support that needs to be addressed before a rally can resume.