Bitcoin (BTC) Price Nears $70,000 Again: Is There Enough Liquidity for Spike to $100,000?

The price of Bitcoin has continued to be bullish for the past week after hitting a local bottom at around $58,000. Since then, there has been an increase

Bitcoin (BTC) price showed bullish continuation over the past week after hitting a local bottom around $58,000. Since then, there has been an increase of more than 15%, reaching a high of over $68,000 on Wednesday.

The price is moving closer to the psychological level around $70,000. The question now remains if there is enough liquidity for BTC to spike to $100,000.

A trader known as Axel Bitblaze, who has more than 108,000 followers on Twitter, shared some insights to discuss if there is enough liquidity for BTC price to spike to $100,000 soon.

$BTC is nearing $70K, and CT is already shouting for $100K BTC and a massive altseason

But let’s talk facts. is there really enough liquidity & catalysts in place to send us higher ?

Here’s my breakdown of upcoming liquidity events with stats. A must read thread: 🧵👇

The Need For More Liquidity

In his thread, Axel highlighted the importance of liquidity in the crypto market, recalling how previous bull runs in 2016 and 2020 were driven by increasing liquidity. He suggested that the current conditions could lead to a similar scenario, but only if the necessary liquidity events materialized.

Axel outlined several key factors contributing to the liquidity landscape:

Stablecoins Market Capitalization: He noted that stablecoins are essential for the crypto ecosystem. Currently, the market cap for stablecoins reached its highest level since the collapse of UST, at $173 billion.

He highlighted that USDT, which has a 69% share of the total stablecoin market cap, has shown a close correlation with Bitcoin’s price movements historically.

FASB Rule Changes: Axel explained the importance of the Financial Accounting Standards Board (FASB) rule, which will allow publicly listed companies to report Bitcoin based on its market value at the end of the reporting period.

This change, which will be effective December 2 valde 2024, could encourage more companies to hold Bitcoin as part of their balance sheets, especially considering the current economic climate and concerns over inflation.

M2 Money Supply: He discussed the M2 money supply, which is currently at $94 trillion. Axel pointed out that for every 10% increase in M2, Bitcoin has historically pumped by 90%. With the money supply increasing and global rate cuts being anticipated, he speculated that more capital could flow into crypto as traditional investments become less appealing.

Money Market Funds: Finally, Axel highlighted the behavior of money market funds, which have reached a new high of $6.5 trillion. As interest rates decline, he predicted a large outflow from these funds, redirecting capital towards riskier assets like Bitcoin.

Axel Bitblaze suggested that it is indeed plausible for Bitcoin to see at least $200 billion in inflows in the coming months which could see Bitcoin spike to $100,000.

He calculated that a mere 0.19% of the total capital in M2 money supply, money market funds, cash holdings, and stablecoins would be enough to drive significant investment into the crypto market.

Follow us on Twitter (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.

Get all our future calls by joining our FREE Telegram group.

We recommend eToro