Bitcoin Price Dips to $62K as Bulls Eye M2 Money Supply

Bitcoin (BTC) managed a slight recovery as it approached $62,000 on August 3, following a recent dip toward $60,000 amid a broader stock market downturn.

BTC Price Reaction to Market Conditions

Data from market analysis tools indicated a rebound of about 3% for BTC after reaching multi-week lows of $60,435 on Bitstamp. This drop coincided with significant declines in global stock markets, notably a 6% drop in the Nikkei, which set the tone for possible further losses on Wall Street. Dismal U.S. employment figures added to market anxiety.

Bitcoin experienced a decline of nearly $5,000, which resulted in it breaching several critical support levels, including the short-term holder cost basis. Liquidations surged, with reports estimating that approximately $230 million in crypto long positions were wiped out on August 1 and August 2.

Market Analyst Insights

Market analysts noticed the dramatic fall in U.S. yields following disappointing job reports, signaling a potential recession. Michaël van de Poppe, trading firm MNTrading’s CEO, noted this trend in a post on X, emphasizing market sentiments of panic as expectations of interest rate cuts surfaced.

Van de Poppe also suggested that recent trends reinforced the probability of the Federal Reserve reducing interest rates, a prospect viewed positively by crypto and risk asset investors. His conclusion indicated that rate cuts for September were highly anticipated.

Meanwhile, The Kobeissi Letter described the macroeconomic scenario as presenting mixed signals, highlighting a shift in discussions from the likelihood of a September rate cut to inquiries about its potential size—whether it would be by 25 or 50 basis points. According to the CME Group’s FedWatch Tool, market probabilities pointed to a 78% chance of a 0.25% cut.

Optimistic Perspectives on Bitcoin

Despite recent market turbulence, some remained optimistic about Bitcoin’s future. Jeff Ross, the founder of Vailshire Partners, conveyed that increasing global liquidity could support BTC’s price trajectory. He shared a chart comparing the global M2 money supply with BTC/USD and its 50-week and 200-week simple moving averages (SMAs).

Ross discussed the potential for a reverse head-and-shoulders pattern forming on Bitcoin’s weekly chart, highlighting a bullish intersection with rising global liquidity.

Long-Term Trading Range Observations

Before the recent downturn, traders expressed growing anticipation that Bitcoin might test the lower bounds of its long-term trading range. Daan Crypto Trades pointed out that Bitcoin has remained within this range for over five months, noting ongoing patterns of lower lows and lower highs, with key levels at $59K and $74K.

This discussion emphasizes the importance of continued research and consideration of risks associated with investment and trading decisions.