Bitcoin whales have recently been opening massive long positions on the cryptocurrency through popular exchanges Bybit and HTX, with the flagship cryptocurrency trading at around $69,000. This activity is reminiscent of a similar trend seen in August 2023, when Bitcoin whales opened large long positions before a parabolic price rise that saw BTC move from $25,000 to a new all-time high above $73,500. This information was shared by Ki Young Ju, CEO of CryptoQuant, who also highlighted that the Thermo Cap ratio indicates that the current price of Bitcoin is not overvalued based on network fundamentals.
The Thermo Cap ratio, calculated by dividing the market capitalization of Bitcoin by the cumulative value of all BTC mined, represents the total investment cost in the network. A higher Thermo Cap ratio signifies stronger network fundamentals, according to Young Ju. This information suggests that despite the recent surge in global liquidity to near $100 trillion, Bitcoin is trading at $71,000 and could potentially benefit from the increase in money supply in the United States. The correlation between the M2 global supply and Bitcoin price movements is highlighted by Philip Swift, founder of LookIntoBitcoin, who shared a chart showing the historic high of M2 nearing $100 trillion.
The current M2 value of $94 trillion has increased by $3 trillion since late 2021 when Bitcoin hit its previous all-time high of $69,000. Additionally, M2 has rebounded by 10% since dipping to $85 trillion in late 2022, coinciding with the crypto bear market. These findings align with other analyses that project a bullish outlook for Bitcoin based on liquidity metrics. The relationship between Bitcoin and the U.S. M1 money supply is also significant, as the metric is breaking out of a seven-year consolidation period, indicating potential for substantial growth. Overall, the recent activities of Bitcoin whales and the increased liquidity in the market could point towards a positive trend for the cryptocurrency.
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