Bitcoin Price Target Is $200K if This Liquidity Trend Holds

Bitcoin is back in the spotlight. As of press time, the Bitcoin price is trading at around $116,000, down 1.73% over the past 24 hours. But a major trend is building beneath the surface.

The global M2 money supply, used to track global liquidity, is rising again. History shows that Bitcoin price usually follows it, with a 10-week delay.

Right now, BTC is moving in sync with M2, and that may push Bitcoin toward a new target: $200,000. On-chain metrics are clearly in support of that thesis/

M2 Liquidity and Profit Signals Are Flashing Green

M2 is rising again. That’s important because more liquidity usually means more demand for Bitcoin. Data from CryptoRank shows M2 is climbing past 112 trillion and projects BTC toward $200K by September.

This is the same pattern that helped Bitcoin price rally in early 2024. It suggests more upside may be coming if the money supply keeps rising.

M2 measures the total cash, savings, and short-term deposits floating around the global economy. When M2 rises, there’s more money chasing assets, like Bitcoin.

That’s why traders are watching it closely now. If there is one Bitcoin macro-driver in play, it is M2.

Bitcoin holders also seem confident. The Spent Output Profit Ratio (SOPR) is above 1, meaning most BTC moved on-chain is still being sold at a profit.

SOPR around 1.02 means holders are not panicking. They’re making gains, but not dumping. That’s typical behavior during early bull phases.

SOPR helps us understand profit-taking. When it’s above 1, people are selling for profit. When it’s below 1, they’re cutting losses.

Right now, Bitcoin traders are sitting on gains and waiting for higher prices. This supports the case for a continued upward trend.

Traders Are Leveraging Up With Bullish Bets

Futures data adds more weight to this view. Bitcoin open interest is now above $84.2 billion. That means more money is flowing into Bitcoin futures.

It shows traders are placing big bets on Bitcoin’s price rise. This is the highest open interest in the last few weeks.

At the same time, funding rates remain positive. That means more traders are going long than short.

On July 24, the BTC funding rate was +0.0119%, according to Coinglass. This shows that bullish traders are still in control of the derivatives market.

However, the figure doesn’t indicate massive leverage, hinting at the fact that the M2 narrative isn’t only speculation-based.

As M2 expands, traders seem more comfortable increasing exposure; this supports real liquidity-backed positioning, not just hype.

Also, people are actually interested in purchasing Bitcoin, meaning that a possible rally could be spot-driven.

Futures open interest tells us how much leverage is in the system. A high number means big bets are being placed.

Funding rates show who’s paying whom. If rates are positive, longs are paying shorts. That means the crowd is betting on higher prices.

Together, these metrics show traders expect Bitcoin price to go up. But if the price drops too fast, we could see liquidations. For now, momentum remains in favor of the bulls.

Stablecoin Reserves and Bitcoin Price Chart Point to $200K

Spot market signals are also turning bullish. The total stablecoin reserves on exchanges remain elevated at around $47 billion. This is important because stablecoins are often used to buy crypto.

A high reserve means capital is ready to be deployed. It suggests investors are waiting to buy the dip.

And this reserve build-up often happens during M2 expansion phases, when cash enters markets before deployment.

Spot BTC outflows are another sign of confidence. When Bitcoin leaves exchanges, it often means holders are storing it for the long term. That reduces sell pressure and can support price rallies.

Over the last week, more BTC has left exchanges than entered.

Looking at the Bitcoin price chart, the Fibonacci extension levels provide a roadmap. The 3.618 Fibonacci level lines up near $200K. This level often acts as a long-term target during strong uptrends.

With the current price holding above $116K, the setup is there. If liquidity continues to grow and traders stay confident, $200K could come into play in the coming months.