The value of Bitcoin and various altcoins is experiencing an upward trend as anticipation builds for a potential 50 basis point interest rate reduction from the Federal Reserve in the upcoming week.
Bitcoin (BTC) has surged past $114,000, while Ethereum (ETH) has climbed above $4,400 and XRP has exceeded $3.
Dogecoin (DOGE) has also seen impressive growth, reaching $0.25 with a daily increase of 5%, culminating in a total weekly gain of 15.9%.
A Historical Link Suggests Bitcoin’s Potential Surge!
As BTC continues its upward trajectory, CF Benchmarks—a prominent British firm—has indicated that Bitcoin is currently trading below its fair value when compared to the growth of US M2 money supply.
Analysts at CF Benchmarks highlighted that the disparity between M2 growth and BTC pricing is at its highest level since August 2024, presenting what they consider an opportune entry point for investors.
The analysts further pointed out that historically significant price increases in Bitcoin have followed similar widening gaps between M2 growth and BTC prices observed in previous years—specifically during 2016, 2019, and 2021.
“Over the last ten years, there has been a positive correlation between BTC prices and M2 monetary expansion; typically, M2 growth lags behind price movements by approximately three months.”
“If this historical pattern holds true, we could witness increased liquidity support for Bitcoin later this fourth quarter.”
Bulls Still Face Challenges!
Despite the bullish implications from the gap between M2 growth and Bitcoin prices, Alex Kuptsikevich—the chief market analyst at FxPro—has pointed out that bulls still need to maintain certain levels technically.
In an interview with Coindesk, Kuptsikevich mentioned that Bitcoin’s current resistance lies around $112,000 while emphasizing that surpassing $115,000 will be crucial for continued upward movement.
“Bitcoin remains appealing to buyers during intraday dips; however it forms a delicate uptrend with key resistance around $112K.”
“The real test comes near $115K which sits just above the critical 50-day moving average. Maintaining above this threshold could indicate a return to bullish momentum; however presently BTC seems to lag behind record-high stock values.”
*This content does not constitute investment advice.