For the first time in nearly two years, a key Bitcoin bull signal has flashed, indicating the potential for a significant price increase. This signal, which has historically been associated with substantial price rallies, was identified by Jamie Coutts, a chief crypto analyst at Real Vision. According to Coutts, this bullish indicator could lead to a doubling of Bitcoin’s price, a prospect that has captured the attention of the cryptocurrency community. The signal is based on Coutts’ global liquidity model, which has accurately predicted previous Bitcoin price surges.
The Bitcoin Bull Signal and Its Historical Significance
The key Bitcoin bull signal, referred to as the “composite global liquidity momentum model (MSI),” was shared by Coutts in an Aug. 15 post on X (formerly Twitter). This model has provided its first bullish regime signal since November 2023. During that period, Bitcoin saw a 75% rally from November to April before the model flipped bearish.
Historically, this signal has been linked to some of Bitcoin’s most significant price increases. For instance, during the 2017 cycle, the same signal preceded a 19-fold rally in Bitcoin’s price. Similarly, in the 2020 cycle, it was followed by a six-fold increase. “My composite global liquidity momentum model (MSI) has provided the first Bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from Nov to April before the regime flipped Bearish,” Coutts wrote in his post, underscoring the potential impact of this signal on the current market.
The MSI’s track record of predicting major price movements makes its recent bullish signal particularly noteworthy. As Bitcoin hovers around $58,145, analysts are closely monitoring whether the cryptocurrency will follow the same pattern as in previous cycles.
Can Bitcoin Price Double?
The flashing of this key Bitcoin bull signal has led to speculation about whether Bitcoin’s price could double, potentially reaching around $120,000. Coutts believes this is possible, but he emphasizes that several factors will play a crucial role in determining whether this bullish scenario materializes. One of the primary factors is the performance of the US Dollar Index (DXY), which measures the strength of the US dollar against a basket of other currencies.
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“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 explained. Global liquidity, which refers to the availability of money in the global economy, is another critical factor. If global liquidity continues to expand, it could provide the necessary conditions for Bitcoin to achieve this price surge.
However, it is important to note that Bitcoin’s price may face some short-term challenges. Over $1.4 billion worth of Bitcoin options are set to expire on Aug. 16 at 8:00 am UTC. Unless Bitcoin can stage a recovery above $60,000, these expirations could create downward pressure on the price, adding an element of uncertainty to the bullish outlook.
Global Liquidity and Its Impact on Bitcoin
The expanding global M2 money supply, which represents the total amount of money available in the global economy, could play a significant role in bolstering Bitcoin’s price. Coutts pointed out that the Bank of Japan added $400 million to the global money base in the past month, while the People’s Bank of China contributed an additional $97 billion worth of credit. Overall, the global money base expanded by $1.2 trillion during this period.
Coutts argues that this trend is likely to continue due to the nature of the credit-based fractional reserve system, where the money supply must continuously expand to support outstanding debt. “This is the natural state in a credit-based fractional reserve system. The money supply must continually expand to support the outstanding debt. Otherwise, everything will collapse,” Coutts noted.
The increasing M2 supply could provide the liquidity needed for Bitcoin to break out above $60,000, especially if central banks around the world continue to inject capital into the economy. However, the performance of US spot Bitcoin exchange-traded funds (ETFs) could also influence Bitcoin’s price trajectory. Recent data from Farside Investors indicates that ETF inflows turned negative on Aug. 14, with a cumulative $81 million worth of outflows after two consecutive days of positive inflows. This stagnation in ETF inflows could pose a challenge to Bitcoin’s potential price surge.
A Quick Wrap Up on Key Bitcoin Bull Signal
The recent flashing of a key Bitcoin bull signal, not seen in nearly two years, has sparked optimism about a potential price surge for the leading cryptocurrency. With historical precedents of significant rallies following this signal, the possibility of Bitcoin doubling in price is on the minds of many investors. However, as Jamie Coutts cautions, this outcome will depend on several factors, including the performance of the US Dollar Index and the continuation of global liquidity expansion. While the future of Bitcoin’s price remains uncertain, the bullish signal provides a promising indication of what might be on the horizon for this digital asset. Keep following TheBITJournal and keep an eye on Bitcoin Bull Signal.
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