Global Liquidity Sees Longest Contraction In Bitcoin History – Trend Analysis

The substantial relationship between Bitcoin (BTC/USD) price and the Total Global Liquidity Index from 2017 through 2025.

Bitcoin achieved its highest price of $82,852.43. It reached that point after beginning in 2017 with a value near $1,400,000.

It holds an average market price of $82,852.43. The total global liquidity index stretches from 90.500 Trillion to 144.268 Trillion.

It reached the highest point at 144 trillion during 2021. Research data indicated Bitcoin prices rose from $1,500,000 in 2022 to its present $84,133.87 value while global liquidity dropped to 112 Trillion by 2023.

Price elements beyond liquidity force its market value despite liquidity’s effect on the crypto asset.

The projected liquidity trend charts suggest that a future market low of 110 Trillion could create conditions for Bitcoin to potentially rise toward $1,000,000.

The Global Liquidity Index has been undergoing its most extensive contraction in Bitcoin’s historical record since 2019 and still continues into 2023.

The duration of this contractive period extends past two-year periods that occurred during 2014–2016 and 2018–2019 since its 2021 peak.

A combination of non-fiats combined with fractional-reserve and debt-based currency would fail to survive without continuous liquidity support.

Modern Western countries, along with China, display debt-to-GDP ratios exceeding 100%.

That make refinancing activities unsustainable because nominal GDP fails to keep up with interest expenses.

Their economy requires continuous liquidity support to protect their assets, including Bitcoin.

Bitcoin vs Global Liquidity

A strong price-to-USD relationship exists between Bitcoin and M2 money supply data with a delay of ten weeks shown through the presented chart.

The depicted time period extends from 2020 through mid-March 2025, as the visualization displays M2 metrics alongside Bitcoin value in USD.

In the current market, it maintains its value at $84,0166.19 following a 0.71% rise. It had reached a maximum price of $109,354.00 after bottoming at $3,880.59.

BTC’s 2021 bull market peak occurred when global liquidity reached its highest point at 94.0 on the right axis scale while M2 values moved between 66.0 and 96.0.

Market liquidity rises before Bitcoin price increases manifest themselves in the market.

BTC price increased from $10,000 to $64,000 after M2 levels grew from 73.0 in mid-2020 to 84.0 by early 2021.

It increased from $28,000 to $82,033.13 while M2 liquidity expanded from 82.0 in 2023 to 90.0 in 2024.

The 10-week offset period suggests that Bitcoin rallies arise from liquidity additions because excess money creates inflation in risk assets.

A later M2 increase during the upcoming weeks will likely push Bitcoin to exceed $90,000 in value according to this chart.