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Bitcoin Bull Signal has flashed for the first time in nearly two years, suggesting the possibility of a substantial price surge. Historically, this particular signal has been closely associated with massive price rallies, raising hopes that Bitcoin could once again be on the verge of a major breakout.
Jamie Coutts, a chief crypto analyst at Real Vision, shared the Bitcoin bull signal Coutts expects Bitcoin to go “much higher,” based on this signal, he wrote in an Aug. 15 X post: His global liquidity momentum model, known as MSI, triggered its first bullish regime since November 2023. “My composite global liquidity momentum model (MSI) has provided the first Bullish regime signal since November 2023,” Coutts stated. “Recall that Bitcoin rallied 75% from Nov to April before the regime flipped Bearish.”
The significance of this Bitcoin bull signal cannot be overstated. During previous cycles, the same signal preceded a 19-fold rally in Bitcoin’s price during the 2017 cycle and a six-fold rally in the 2020 cycle. This historical correlation has led many to believe that Bitcoin could be on the cusp of another explosive price movement.
Coutts predicts that the Bitcoin bull signal could translate into a two to three-fold increase in Bitcoin’s price, potentially pushing it to around $120,000. “This bullish signal has historically been a precursor to significant price increases, and I expect Bitcoin to go much higher this time around as well,” Coutts explained.
However, Coutts also noted that the realization of this Bitcoin bull signal is contingent upon several factors, particularly the performance of the U.S. Dollar Index (DXY) and overall global liquidity. “For BTC to meet this target, the DXY would need to be well below 101, prompted by ongoing central bank injections. This would push global M2 well over $120T this cycle,” Coutts elaborated.
The expanding global M2 money supply is a crucial factor that could support Bitcoin’s potential breakout. Over the past month, central banks, including the Bank of Japan and the People’s Bank of China, have added significant amounts of credit to the global money base. Specifically, the Bank of Japan added $400 million, while the People’s Bank of China contributed $97 billion, expanding the global money base by $1.2 trillion.
Despite the optimism surrounding the Bitcoin bull signal, there are potential short-term challenges. Over $1.4 billion worth of Bitcoin options are set to expire on August 16, which could impact the market if Bitcoin fails to stage a recovery above $60,000. The expiration of these options may lead to increased volatility, potentially hindering the bullish momentum.
Furthermore, Bitcoin’s price action will be closely tied to the inflows from U.S. spot Bitcoin exchange-traded funds (ETFs). Recent data from Farside Investors indicates that ETF inflows have stagnated, with a cumulative $81 million worth of negative outflows on August 14 following two consecutive days of positive inflows. These outflows could dampen the impact of the Bitcoin bull signal if the trend continues.
Industry experts are cautiously optimistic about the implications of the Bitcoin bull signal. “This signal has historically been a strong indicator of upcoming price movements, and its reappearance is certainly something to pay attention to,” said Sylvia Jablonski, CEO of Defiance ETFs. “However, it’s important to consider the broader macroeconomic factors at play, including global liquidity and central bank policies, which will ultimately determine the extent of any potential rally.”
Michael Saylor, founder of MicroStrategy and a well-known Bitcoin advocate, also weighed in on the signal’s significance. “Bitcoin has consistently demonstrated its resilience and potential for growth, especially when key bullish indicators like this one appear,” Saylor remarked. “The coming months will be crucial in determining whether this signal leads to another major rally.”
As the market continues to monitor the situation, the reappearance of the Bitcoin bull signal marks a pivotal moment for Bitcoin. With the potential for a substantial price increase, investors and traders alike are keenly watching how global liquidity and macroeconomic factors will influence Bitcoin’s trajectory.
While the Bitcoin bull signal provides hope for a new surge, the market must navigate several challenges, including option expirations and ETF inflows. As always, the interplay between traditional financial markets and the cryptocurrency space will play a crucial role in determining the outcome of this promising signal.
In summary, the flashing of this key Bitcoin bull signal offers a glimmer of optimism for Bitcoin enthusiasts. Whether this will lead to the much-anticipated price surge remains to be seen, but the potential for significant gains has certainly captured the market’s attention. Get more from The Bit Gazette
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