Crypto analyst Colin has raised alarms regarding a recent divergence between Bitcoin's price and the Global M2 money supply, suggesting that this could indicate the end of the current bull market. However, he quickly reassured followers that such deviations are common and do not undermine the larger macroeconomic trend.
In a post on X, Colin pointed out that Bitcoin has experienced a short-term deviation from the global M2 money supply, despite a broader historical correlation. He mentioned that this situation mirrors Bitcoin's position back in February 2025.
Colin emphasized that this development does not imply that the M2 money supply is failing, just as it was not deemed flawed in February. Instead, he believes market participants may not be considering the bigger picture, allowing for periods of non-correlation. He noted that such non-correlation occurs approximately 20% of the time and referred to charts demonstrating a strong overall correlation between Bitcoin and the global M2 money supply.
According to Colin, the M2 money supply serves as a “directionally predictive” tool for Bitcoin, although it is not a direct price indicator. He clarified that while the M2 does not forecast specific Bitcoin prices, it effectively predicts market direction with around 80% accuracy. Colin also suggested that the M2 could decouple from Bitcoin as the market approaches its peak cycle, although he did not specify when this peak might occur. His analysis indicates that the bull market is still ongoing.
In another post, market expert Raoul Pal remarked that the correlation between Bitcoin's price and the money supply suggests there is no cause for concern regarding current price fluctuations. He stated that if 89% of Bitcoin's price movements can be attributed to global liquidity, then most narratives and news surrounding price changes are likely distractions.
Pal's insights imply that ongoing geopolitical tensions, particularly the Israel-Iran conflict, are unlikely to significantly affect Bitcoin's price. The trading firm QCP Capital also noted that Bitcoin has not yet displayed signs of panic, indicating the asset's maturation. They highlighted that BTC's stable price movements appear to be supported by continued institutional investment, with firms like Strategy and Metaplanet capitalizing on price dips. Additionally, Bitcoin ETFs are continuing to see positive inflows.
As of the latest data from CoinMarketCap, Bitcoin is trading at approximately $104,700, reflecting a decline over the past 24 hours.
