A key Bitcoin bullish signal has appeared for the first time in nearly a year, signaling a potential price breakout.
Jamie Coutts, chief analyst at Real Vision, Chia the bullish Bitcoin signal from the global liquidation model.
Coutts expects Bitcoin to go “much higher” based on this signal. He wrote in an X post on August 15:
“My aggregated global liquidation dynamics (MSI) model has delivered its first bullish signal since November 2023. Recall that Bitcoin rallied 75% from November to April before the regime flipped bearish.”
Bitcoin Trends and Global Liquidation Regime | Source: Jamie Coutts
According to Coutts, similar bullish signals preceded the 19x BTC rally in the 2017 cycle and the 6x rally in the 2020 cycle.
According to Coutts' estimates, the bullish signal could send Bitcoin up two to three times.
However, this largely depends on the performance of the US Dollar Index (DXY) and overall global liquidation . Coutts explains:
“For BTC to achieve this target, DXY would need to be below 101, fueled by ongoing central bank money pumping. This would push global M2 to over $120 trillion this cycle.”
However, Bitcoin prices may face short-term headwinds. Over $1.4 billion worth of Bitcoin options are set to expire at 15:00 on August 16 (UTC+7) unless Bitcoin can rally above $60,000.
The continued expansion of the global M2 money supply could help Bitcoin surge above $60,000.
Over the past month, the Bank of Japan has added $400 million while the People's Bank of China has added $97 billion worth of credit to the global money base, expanding it by $1.2 trillion, according to Coutts.
This trend is likely to continue due to the economics of fractional reserve systems, Coutts added:
“This is the natural state of affairs in a credit-based fractional reserve system. The money supply must continually expand to support the outstanding debts. Otherwise, the whole thing collapses.”
However, Bitcoin’s price action will depend heavily on inflows into US spot ETFs , which have stagnated recently.
Bitcoin ETF Spot Flows ($ Million) | Source: Farside Investors
After two consecutive days of positive inflows, ETF inflows turned negative on August 14, as U.S. ETFs saw a cumulative $81 million in negative outflows, according to Farside Investor data.
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Dinh Dinh
According to Cointelegraph
