Following the rejection at $100,000, the Bitcoin price is currently tracking the global M2 money supply, indicating a 20-25% BTC retracement from the top.
Bitcoin’s price fall may extend to $88,000 or lower if it follows the Global M2 money supply connection. BTC has already fallen by more than 9% in the previous four days as a result of the rejection below the $100,000 mark. Market watchers predict this correction will continue as the BTC rise cools and long-term holders book profits.
Bitcoin price and Global M2 Money correlation
Historically, the Bitcoin chart has always tracked the Global M2 Money connection, and the latest Bitcoin correction is consistent with the global liquidity indicator. Since September 2023, BTC price movement has closely matched M2 supply with a 70-day lag, according to prominent analyst Joe Consorti.
In a recent update, Consorti emphasized the correlation’s precision, stating that the Bitcoin price decreased $5,000 in a single day, consistent with trends established by global M2 weeks prior.
The expert cautioned that if this pattern continues, Bitcoin might see a 20-25% drop from its recent highs of $99,000. However, Joe Consorti remains cautious, stating that “we’ll have to see if BTC follows the global M2 path all the way down or stops short and finds support.”
As of press time, the Bitcoin (BTC) price was trading 1.95% down at $92,864, with a market capitalization of $1.84 trillion and daily trading volumes reaching $91.14 billion. BTC open interest has also fallen 4.74% to under $60 billion, while options open interest has increased 34% to $5.92 billion ahead of Friday’s expiration. Altcoins, like Bitcoin, are sliding today as market enthusiasm fades.
BTC on-chain data signals weakness
According to the latest Glassnode data, long-term holders (LTHs) have increased their activity, with selling pressure reaching a monthly high of 366,000 BTC. This represents the biggest amount of Bitcoin unloading by LTHs since April 2024. Analysts added:
“Since the peak in LTH supply set in September, this cohort has now distributed a non-trivial 507k BTC. This is a sizeable volume; however, it is smaller in scale relative to the 934k BTC spent during the rally into the March 2024 ATH”.
Bitcoin price may crash to $88,000 and below?
With the Bitcoin price losing its critical support of $94,000, market analysts have begun to set even lower objectives of $88,000 and even $80,000.
In addition to worldwide M2 supply, crypto analyst Justin Bennett identifies crucial liquidity zones for Bitcoin, with the largest block of BTC liquidity in the past 30 days located at $73,000, the same levels from where the Bitcoin price climb to $100K started. Bennett believes that as long as Bitcoin stays below $93,600, $86,000 and $73,000 are important price levels to monitor.
According to the prediction market Kalshi, the chances of Bitcoin hitting $100,000 have decreased from 92% to 64%. Also, in the last four days, the probabilities of Bitcoin reaching $100K by the end of November have dropped from 88% to 18%. MicroStrategy, the world’s largest corporate Bitcoin holder, had its stock price fall 35% in only four days.
MicroStrategy (MSTR) stock pump and dump, are retail investors trapped?
Retail investors invested more than $100 million in MicroStrategy stock immediately before the 35% drop, but experts forecast a recovery in MSTR soon.
MicroStrategy stock has been under severe selling pressure, falling further 12% on Tuesday and closing at $353. MicroStrategy (NASDAQ: MSTR) has already lost 35% of its value in the last five trading days since its high on November 21. The recent decline in the price of Bitcoin to $92,000 adds more selling pressure on MSTR, in what seems to be a typical pump and dump scenario for individual investors.
MicroStrategy stock drops along with Bitcoin
While the Bitcoin price fell by 9-10% in the last four days, the MicroStrategy stock fell by 35%, four times as much. This destroyed $30 billion from the company’s market capitalization in only four trading sessions.
MSTR, a popular leveraged Bitcoin bet or Bitcoin proxy, is now experiencing significant volatility. Unfortunately, individual investors became ensnared in the market frenzy.
According to The Kobeissi Letter, individual investors spent nearly $42 million on MSTR shares last Wednesday, the greatest single-day buy in the company’s history. This increase in activity was eight times greater than the daily average seen in October. Over the previous week, ordinary investors invested a whopping $100M into MSTR.
During the month of November, particularly following Donald Trump’s election, the link between MSTR and Bitcoin increased. However, following the stock’s 35% drop, MSTR and Bitcoin are trading 37% higher on the monthly chart.
As a result of the current decline, Microstrategy’s value multiplier has decreased from 3.34x to 2.36x in just five days. It is the result of Bitcoin’s recent price drop and an even greater reduction in the MSTR stock price. MSTR is still trading at 2.1x its Bitcoin holdings, with a current market capitalization of $73.1 billion.
On the other side, creator Michael Saylor has continued to strengthen the company’s Bitcoin holdings, raising its BTC reserves by almost 16% in the last week. MicroStrategy has acquired 55,500 Bitcoins for a stunning $5.4 billion, bringing its total holdings to 386,700 BTC.
Where is MSTR heading next?
With MSTR down 35% from its top, every investor is wondering where the price will go next. During Tuesday’s trading session, the MSTR stock challenged its 20-day Exponential Moving Average (EMA) near the day’s lows and maintained it, indicating probable support.
Analyst Traderstewie predicts a comeback, with tomorrow’s session likely to set off a bounce or reversal phase. The expert suggested that if the MSTR stock begins with an upward gap, traders should look for a short gap fill before a probable reversal, which may lead to a substantial rebound. On the other side, some analysts feel Marathon Digital (MARA) is a better investment than MSTR.
The recent price drop has provided MicroStrategy and Bitcoin detractors like Peter Schiff an opportunity to amplify their criticism. Schiff wrote: “It’s now been four weeks since the company announced its three-year plan to spend $42 billion buying Bitcoin. MSTR has already spent $10 billion. At this rate, the three-year plan will be completed in about 16 weeks. Once the buying is done, expect both Bitcoin and MSTR to crash”.
Donald Trump eyes AI czar in joint vision for AI and crypto leadership
President-elect Donald Trump is allegedly considering appointing a dedicated “AI czar” to oversee federal policy and lead advances in artificial intelligence (AI).
This proposed action demonstrates Trump’s commitment to preserve the United States’ technical superiority.
Trump’s intertwined leadership in crypto and AI
This post would be responsible for administering and coordinating federal AI policy, marking a substantial shift toward centralizing AI control in the US government. According to sources, Elon Musk, who already plays a key position in Trump’s Department of Government Efficiency, might have a considerable effect on the pick. However, he is unlikely to take the position directly.
The proposed AI czar would work alongside agency artificial intelligence officers, as established by President Joe Biden’s executive order. The office would guarantee that the United States remains at the forefront of artificial intelligence developments. It would also tackle crucial issues like government efficiency and fraud prevention.
Furthermore, the AI czar’s office would direct private investment to increase the energy and computational resources needed for artificial intelligence. These goals are consistent with Trump’s wider technical and economic plans, which emphasize deregulation and private-sector development.
“Appointing an AI czar signals that the incoming administration is placing AI at the forefront of its agenda- and rightly so. As the lead for federal AI efforts, the Czar should focus on two key priorities to help fulfill the president-elect’s economic goals: accelerating adoption and safeguarding US competitiveness,” the Center for Data Innovation said in a statement.
It occurred only days after claims surfaced that Trump was considering a comparable push in the digital asset industry, including the hiring of a “crypto czar.” Chris Giancarlo, the former chair of the Commodity Futures Trading Commission (CFTC), is a leading candidate for this position. Giancarlo, often known as “Crypto Dad,” has advocated for blockchain adoption and is the leader of the Digital Dollar project.
Other possibilities being considered include Coinbase CEO Brian Armstrong and former Binance.US executive Brian Brooks. Trump’s team is also considering merging the AI and cryptocurrency posts into a single emerging technologies czar. Taken together, these discoveries demonstrate the interwoven potential of crypto and AI to reshape the economy.
Crypto’s regulatory shift: Implications and industry reactions
In parallel, Trump’s crypto czar would spearhead regulatory measures aimed at encouraging innovation and bringing clarity to the blockchain business. Trump has pledged a new regulatory council for digital assets, indicating a shift away from the SEC’s (Securities and Exchange Commission) controversial posture under departing Chair Gary Gensler. Acquiring a stake in the cryptocurrency exchange Bakkt is also being discussed, which may link Trump’s investments with his legislative goals.
Industry executives regard these appointments as critical. Charles Hoskinson, Cardano’s founder, applauded the concept of a crypto czar but underlined the importance of a neutral individual who knows the unique possibilities of blockchain technologies.
With respect to the idea of a Crypto-Czar at the Whitehouse, I feel the role needs to be filled with someone who is neutral, works with all the protocols, and has a deep understanding of why crypto is special as well as what the US government under Biden has done wrong.
There…
— Charles Hoskinson (@IOHK_Charles) November 20, 2024
However, questions have been expressed concerning potential conflicts of interest. Musk’s engagement in crafting AI legislation, in particular, may help his firms, including xAI.
In retrospect, the billionaire entrepreneur has a history of public feuds with competing CEOs, including OpenAI’s Sam Altman and Google’s Sundar Pichai. Some believe he may use his ties with Trump to benefit his enterprises.
Nonetheless, by cementing leadership in AI and cryptocurrency, Trump seeks to establish the United States as a worldwide leader in new technologies. Whether these initiatives strike the right balance between innovation and regulation will determine their legacy in these disruptive sectors.
