As 2025 begins, the cryptocurrency market is showing signs of recovering from the correction that occurred in late December, setting an optimistic tone for the year ahead. Bitcoin, the market leader, has shown remarkable resilience by maintaining strong support at $92,000 despite recent selling pressure. This stability has renewed investor confidence, with many looking forward to a potential continuation of its upward trajectory.
Senior analyst Axel Adler recently shared insightful data, emphasizing the importance of global liquidity trends in Bitcoin’s growth. According to Adler, the influx of global liquidity – albeit with a slight delay – is likely to provide a significant boost to Bitcoin in the coming months. This is in line with broader expectations of increased institutional interest and growing recognition of BTC as a hedge against macroeconomic uncertainty.
As the broader market begins to wake up, Bitcoin appears well positioned to capitalize on this renewed momentum. Analysts and investors alike are watching the price action closely, especially as it remains above the critical support level of $92,000. If this level holds, Bitcoin could be poised for a new rally, potentially reclaiming its all-time highs and paving the way for a strong year in 2025. For now, all eyes are on the market leader as it navigates this pivotal moment.
Bitcoin growth is supported by M2
Bitcoin has historically seen significant growth every time the global money supply (M2) begins to rise, and this correlation has received attention from analysts and investors who are anticipating a massive rise for BTC in the near future. Analysts believe that Bitcoin is poised to benefit from the continued expansion in global liquidity.
A compelling chart shared by CryptoQuant analyst Axel Adler on The chart reveals a clear relationship between the two, with a noticeable 4-6 month lag between increases in M2 and Bitcoin price growth. This pattern indicates that as central banks continue to adopt expansionary monetary policies and pump liquidity into the global economy, Bitcoin is likely to see a significant upward movement.
The relationship between M2 and Bitcoin underscores how the cryptocurrency can act as a hedge against inflation and a store of value in an environment of increasing global liquidity. As central banks continue to pursue accommodative policies, including low interest rates and money supply growth, Bitcoin will benefit from this macroeconomic trend.
As M2 grows, the price of Bitcoin historically follows suit, driven by increased liquidity entering the market. Given the current path of central banks pushing expansionary monetary policies, this trend indicates a positive outlook for Bitcoin in 2025. Investors and analysts alike are watching these developments closely, with many expecting Bitcoin to see another major rally as global liquidity continues to rise. .
Price Action: Technical Levels
Bitcoin is currently trading at $96,500 after strong demand was confirmed at the $92,000 level. This price action comes after several days of selling pressure, suggesting that the bulls have regained control, at least for now. The strong recovery from $92,000 has provided confidence in the market, but the critical $100,000 mark remains a major hurdle.
For the rally to occur, bulls must regain this psychological level. A break above $100,000 would signal further bullish momentum, which could push Bitcoin to new highs. However, there is still a risk as BTC remains below this key level. If Bitcoin fails to break and hold above $100,000 in the coming weeks, the market could face further consolidation or even a pullback.
An inability to clear the $100,000 level could result in a loss of momentum, which could lead to a deeper bounce. Traders and investors are closely monitoring Bitcoin’s ability to maintain its current strength. The next few weeks will be crucial in determining whether BTC is able to break through this resistance or whether it will face further challenges in price action.
Featured image by Dall-E, chart from TradingView