In a recent analysis disseminated through X, well-known crypto analyst Ted (@tedtalksmacro) has presented compelling arguments indicating that the ongoing Bitcoin bull market is not yet at its conclusion. Ted's analysis is grounded in four key indicators spanning both traditional finance and crypto liquidity, all of which suggest continued expansion in the foreseeable future. Below is a summary of his findings:
Ted emphasizes the significance of the 65-month liquidity cycle, a historical trend that tracks the fluctuation of liquidity within financial markets. According to Ted's analysis, this cycle hit its low point in October 2023, indicating the onset of a new phase of expansion.
"We're currently experiencing the expansion phase, which is forecasted to peak in 2026," Ted remarked. This forecast corresponds with the expected monetary policy relaxation by central banks in reaction to sluggish economic indicators over the next 18 to 24 months. Historically, heightened liquidity has foreshadowed bull markets across various asset categories, including Bitcoin and the wider crypto landscape.
Ted underscores the significance of the M2 money supply, encompassing cash, checking deposits, and readily convertible near money, as a pivotal indicator, if not the most critical one, of global liquidity. He observes that the rate of growth in the M2 money supply is currently at its lowest level since the 1990s.
"There's substantial potential for liquidity conditions to improve," he clarified. As central banks contemplate easing monetary policies to invigorate economies, a surge in M2 growth could potentially drive more capital towards risk assets such as Bitcoin.
Even though liquidity has made a comeback in the crypto markets, especially following the introduction of spot Bitcoin ETFs, Ted highlights that the speed of incoming funds has yet to match the levels observed during cycle peaks. "The pace of incoming funds hasn't reached the frenzied stage typically associated with cycle peaks," he observed.
This indicates that while there's growing interest and investment in Bitcoin, the market hasn't yet reached the speculative frenzy that often precedes a significant correction. This period of cautious inflow may establish a more solid footing for sustained price gains.
The spot Bitcoin ETFs based in the US have experienced substantial inflows, with last week alone witnessing a flow of $950 million into these ETFs, marking the largest net inflow since March. Ted anticipates these inflows to escalate further as the price of Bitcoin rises and traditional finance investors regain trust in the asset.
"Anticipate these inflows to grow as the price continues to climb and traditional finance once again embraces confidence in the asset," he affirmed. The increasing acceptance and investment from institutional investors through ETFs serve as robust bullish indicators for Bitcoin's ongoing upward trajectory.
Each of these elements collectively signals a durable and vigorous bull market for Bitcoin. Ted's analysis, which draws from both traditional financial metrics and crypto-specific data, offers a thorough perspective on the present and prospective condition of the Bitcoin market. With central banks potentially considering monetary policy adjustments and institutional interest steadily increasing, the environment seems favorable for Bitcoin's bullish momentum to persist well into the foreseeable future.
May 2024, Cryptoniteuae