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Bitcoin Bull Run Poised for Boost as Global Liquidity Hits Record $94 Trillion

Hassan Shittu
Last updated: | 3 min read
Bitcoin Bull Run Poised for Boost as Global Liquidity Hits Record $94 Trillion

Bitcoin’s ongoing bull run may receive a significant boost as global liquidity reaches a new all-time high.

According to a new analysis by Philip Swift, creator of the on-chain data platform LookIntoBitcoin, global liquidity has surged to a record $94 trillion, setting the stage for potential further upside in BTC prices.

A New All-time High for Global Liquidity

On June 5, Philip Swift published an analysis highlighting that global liquidity, measured by the world’s M2 money supply, has hit an all-time high. In U.S. dollar terms, M2 is now at $94 trillion, surpassing the previous peak and standing $3 trillion higher than when Bitcoin achieved its former all-time high of $69,000 in late 2021.

Experts claim this rebound represents a significant recovery from the local lows of $85 trillion seen in late 2022, which coincided with the depths of the crypto bear market.

Global liquidity (M2) Vs Bitcoin Price. Source: Philip Swift

Swift’s analysis stressed the critical role of global liquidity trends in influencing Bitcoin and crypto markets. He notes that the current conditions are highly favorable for BTC price appreciation and references sentiments from other liquidity-based analyses that predict bullish Bitcoin outcomes.

In one of his comments on X, Swift emphasized the significance of the new all-time high in global liquidity; he said,

“The most important chart for this bull run has reached an all-time high. Are you ready?”

This bullish outlook aligns with other findings suggesting that Bitcoin’s price behavior is closely tied to trends in global liquidity.

As financial conditions become more favorable, there is growing evidence of increased interest among institutional investors in Bitcoin and other risk assets.

On-chain analytics platform CryptoQuant’s latest “Weekly Report,” shared recently, drew parallels between current investor behavior and the trends observed in 2020. The report showed that large investors are adding approximately $1 billion to Bitcoin, mirroring the activity before the massive rally from $10,000 to $70,000 in 2020.

Despite low price volatility, on-chain activity remains high, with significant daily inflows into new whale wallets. Institutional investors are accumulating Bitcoin and are likely placing their holdings in custody wallets.

Additionally, CryptoQuant noted substantial inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), marking their second-highest net inflows on June 4. This surge in ETF inflows was also cited as another indicator of the growing institutional interest and confidence in Bitcoin as a valuable asset class.

Bitcoin Getting Green Lights From All Angles

According to a recent on-chain analysis by Glassnode analyst James Check, Bitcoin’s price is poised for significant movement following a period of low volatility. The Sell-Side Risk Ratio for Short-term Holders has sharply declined, indicating a market eagerly awaiting new price levels.

This ratio, which compares traders’ realized profits and losses to Bitcoin’s realized cap, suggests that the current price levels have exhausted profit-taking, indicating an imminent price shift.

Check explained that low realized profits and losses relative to the realized cap imply that most traders who intended to take profits or losses at the current prices have already done so, suggesting a price move is necessary to reinvigorate trading activity.

Notably, Michael Novogratz, CEO of Galaxy Digital, also recently predicted Bitcoin could reach $100,000 by the end of the year, driven by a rapid rise to $73,000 in the coming weeks due to favorable developments in the U.S. political landscape for digital assets.

He cites current market dynamics and recent political shifts, including increased political engagement and potential SEC approval of ETFs investing directly in Ether, as key factors supporting this bullish outlook.

As Bitcoin recently rose to $71,005, nearing its all-time high, Novogratz believes the cryptocurrency is set for significant gains, especially with bipartisan agreement on the need for crypto legislation.