- News related to ETF, combined with the upcoming halving event, is widely seen as a significant catalyst that could propel Bitcoin to another record level.
- An analyst suggests that Bitcoin might be on the brink of a significant global money supply rally, challenging the traditional halving theory.
- According to the analyst, Bitcoin’s potential rally is closely related to two key indicators in global money supply: Chinese bond yields and the Chinese Yuan.
Examining the correlation between Bitcoin and global money supply indicators, the analyst makes evaluations about the price rally.
Correlation Between Global Money Supply and Bitcoin
Bitcoin (BTC) is currently struggling to regain a new all-time high with speculation surrounding the potential approval of a spot exchange-traded fund (ETF) by United States regulators.
News related to ETF, combined with the upcoming halving event, is widely seen as a significant catalyst that could propel Bitcoin to another record level. However, some analysts propose that Bitcoin could receive support from an additional catalyst.
In particular, on December 1, a renowned crypto analyst suggested that Bitcoin might be on the brink of a significant global money supply rally, challenging the traditional halving theory. The halving theory suggests that Bitcoin experiences significant price rallies after each halving event.
According to the analyst, Bitcoin’s potential rally is closely related to two key indicators in global money supply: Chinese bond yields and the Chinese Yuan. The analysis compares Bitcoin’s correlation with these metrics against the U.S. Dollar, U.S. balance sheet, Chinese Central Bank balance sheet, and the assets of the European Central Bank.
According to the analyst, historically, Bitcoin tends to bottom when it falls below the Yuan trendline, and a parabolic rally begins when Chinese bond yield trendline reaches low levels. Currently, there is a situation where the Chinese bond yield trendline has risen after reaching a low level.
The analyst said, “This is contrary to common belief and the traditional Halving theory, but it could mean that BTC might have started a new parabolic rally much earlier than expected, according to the above money metrics.”
Bitcoin Aims for $40,000
Indeed, Bitcoin has reached its highest level since May 2022. These gains, resulting from challenges in the crypto market in 2022, are combined with expectations of possible interest rate cuts by the Federal Reserve next year and the approval of the first spot Bitcoin ETF in the U.S.
At the same time, after surpassing the significant psychological threshold of $38,000, most Bitcoin holders find themselves in a profitable position. As of December 1, 85% of Bitcoin addresses are in a profitable state, 11% are at a loss, and 4% are at break-even. This marks the highest profitability level for the asset in over two years.
As of the time of writing, Bitcoin is trading at $38,775 and has gained over 1% for the day. Looking at weekly charts, Bitcoin has experienced an almost 3% increase. According to technical analysis, the leading cryptocurrency is generally influenced by bullish trends. A daily measure summary leans towards a 14-to-1 ‘buy’ signal, while moving averages indicate a 14-to-1 ‘strong buy.’ Meanwhile, oscillators tend towards a 2-to-1 ‘sell’ signal.
Considering market conditions and price movement, Bitcoin appears to be progressing towards the critical level of $40,000, showing significant momentum that could lead to a new all-time high.
