Over the past five days, Bitcoin has undergone a significant correction following an aggressive rally that propelled the price from approximately $66,800 to nearly $99,690—just shy of the much-anticipated $100,000 milestone. This sharp pullback saw Bitcoin drop over 8%, settling around $90,835.50. However, signs of resilience emerged the next day with a 4.22% bullish candle, forming a bullish engulfing pattern—a classic technical signal that often precedes a reversal in downtrends.
For seasoned crypto investors, this kind of price behavior isn’t surprising. Bitcoin has historically demonstrated a tendency to either front-run or overshoot key psychological price levels before correcting. With the initial hype cooling down, market participants are now closely watching for clues about the next major move.
According to financial analyst Joe Consorti, one of the most compelling indicators pointing toward a deeper correction is the Global M2 money supply chart, which suggests Bitcoin could potentially fall below $70,000 in the coming weeks.
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Understanding the Bitcoin and Global M2 Correlation
A growing body of analysis suggests that Bitcoin’s price has been tracking changes in the global money supply (M2) with a lag of approximately 70 days since September 2023. This relationship, while not universally accepted, has shown notable consistency over recent months.
"Bitcoin has tracked global M2 with a ~70-day lag since September 2023. I don't want to alarm anyone, but if it continues, Bitcoin could be in for a 20–25% correction."
— Joe Consorti
The premise is straightforward:
- When global liquidity expands, Bitcoin tends to rise about 70 days later.
- Conversely, when money supply contracts, Bitcoin often follows with a delayed downturn.
Consorti’s analysis overlays scaled versions of the Global M2 data and Bitcoin’s price chart, creating a visual correlation. Critics argue that the scaling introduces subjectivity, potentially aligning patterns retroactively. Nevertheless, the model has correctly predicted key turning points in 2023 and 2024, lending it some credibility among macro-focused traders.
Key Technical Levels to Watch on Bitcoin’s Daily Chart
While macro indicators offer context, technical analysis provides actionable entry and exit zones. On the daily timeframe, several critical support and resistance levels are shaping Bitcoin’s short-term outlook.
Point of Control: $91,704.80
Bitcoin recently found temporary support at the $91,704.80 level—identified as the Point of Control using a Fixed Range Volume Profile from the November 4th rally. This zone represents where the highest trading volume occurred during the upward impulse, making it a magnet for price reactions.
Resistance at Fibonacci 0.618 Level
The rebound from the recent low was rejected near the 0.618 Fibonacci retracement level at $96,326.80, a well-known area of resistance in bullish trends. This rejection reinforces bearish sentiment and increases the likelihood of further downside.
Dynamic Support: Daily EMA 20
Currently sitting at $90,413.50, the 20-day Exponential Moving Average (EMA) serves as dynamic support in strong uptrends. A successful retest and hold above this level could signal that the correction is ending and bullish momentum is returning.
Fair Value Gap (FVG) Zone: $81,651 – $85,205
A significant Fair Value Gap (FVG) exists between $81,651.30 and $85,205.40. This gap coincides with:
- The 50-day EMA
- The 0.5 Fibonacci retracement level ($83,249)
Such confluence strengthens this zone as a high-probability area for a bounce—if reached.
Long-Term Support: EMA 100 at $73,785
The 100-day EMA, currently at $73,785.50, aligns closely with the projected downside target derived from the Global M2 model. A drop to this level would represent a 20–25% correction from recent highs but could present a compelling long-term buying opportunity for investors focused on macro cycles.
Evaluating the Reliability of the Global M2 Model
While intriguing, the Global M2 correlation should not be used in isolation. Let’s examine both its predictive successes and limitations.
When the Model Worked
- January 2023 – March 2023: A rise in global money supply in January preceded Bitcoin’s strong rally in March—consistent with the 70-day lag.
- June 2023 – August 2023: A contraction in M2 during June correlated with Bitcoin’s decline in August, further supporting the model’s validity.
When It Failed
- September 2022 – December 2022: Despite steady growth in Global M2, Bitcoin remained range-bound with minimal price movement.
- May 2023 – July 2023: A sharp increase in liquidity did not trigger any significant Bitcoin rally within the expected timeframe.
Common Criticisms
- Subjective Scaling: The method requires manual scaling adjustments to align datasets, which may introduce confirmation bias.
- Overlooks Market Sentiment: Bitcoin is influenced by more than just monetary policy—factors like ETF approvals, regulatory news, and on-chain activity also drive price.
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Frequently Asked Questions (FAQ)
Q: What is Global M2 and why does it matter for Bitcoin?
A: Global M2 refers to the total amount of money in circulation across major economies, including cash, savings deposits, and other near-money assets. As more liquidity enters the system, investors often seek higher returns in risk assets like Bitcoin—typically with a time lag.
Q: Is the 70-day lag between M2 and Bitcoin consistent?
A: It has held true in several instances since late 2023 but isn’t foolproof. Periods like mid-2023 show deviations due to external market forces overriding macro trends.
Q: Could Bitcoin really fall below $70,000?
A: Technically, yes. A 25% correction from $99k brings it near $74k–$75k. If broader market conditions worsen or macro liquidity tightens further, a move toward $70k is plausible—but not guaranteed.
Q: What technical indicators confirm a potential bottom?
A: Watch for bullish reversal patterns like hammer candles or bullish engulfing formations near key support zones (e.g., FVG or EMA 100), along with rising volume on up-moves.
Q: Should I sell if Bitcoin approaches $70,000?
A: Not necessarily. Historically, deep corrections often create generational buying opportunities. Many long-term holders view such levels as accumulation zones rather than exit points.
Q: How can I track Global M2 data myself?
A: Publicly available data from central banks (like the U.S. Federal Reserve, ECB, and BoJ) can be aggregated to estimate global M2 trends. Tools like Trading Economics or FRED provide accessible datasets.
Final Outlook: Balancing Macro and Technical Analysis
Bitcoin is currently navigating a critical juncture. The recent correction reflects typical post-rally consolidation behavior, but the interplay between macro forces and technical structure suggests further downside may be ahead.
The Global M2 model offers a compelling narrative for a potential drop toward $73,785–$70,000, especially if liquidity continues to contract globally. However, technical levels such as the EMA 20, FVG zone, and Fibonacci retracements will likely dictate intraday momentum and short-term reversals.
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Ultimately, successful navigation of this phase requires combining multiple analytical lenses:
- Use macro models like Global M2 for strategic timing.
- Rely on technical levels for tactical entries and risk management.
- Stay updated on sentiment drivers like regulatory news and institutional adoption.
As always, trading involves substantial risk—especially in volatile markets like cryptocurrency. Investors should conduct thorough due diligence and consider portfolio diversification to manage exposure.
This content is for educational purposes only and does not constitute financial advice.