Historical Patterns Suggest Bitcoin Price Rally is Just Around the Corner

Jamie Coutts from Real Vision believes Bitcoin (BTC) may be nearing a significant price rally due to favorable market conditions.

Coutts points out that global liquidity is increasing, which historically has signaled bullish trends for Bitcoin. He notes that this rise in liquidity comes as the market is shedding excess leverage and excitement from recent exchange-traded fund (ETF) launches.

Over the past decade, #Bitcoin has had a tendency to trough several months before the bottom in global M2. Then it rips, gets way ahead of the move in liquidity, and has a mid-cycle correction.

Now, momentum in global liquidity is starting to accelerate higher while all the… pic.twitter.com/0A9hV9m25h

— Jamie Coutts CMT (@Jamie1Coutts) August 13, 2024

He explains that Bitcoin often bottoms out months before a global money supply low and then rallies strongly ahead of liquidity improvements, followed by a mid-cycle correction.

In a debt-based fractional reserve financial system, the money supply must continually expand to support the outstanding debt. Otherwise, everything will collapse. This is the natural state. #Bitcoin pic.twitter.com/nAuFstnB2Z

— Jamie Coutts CMT (@Jamie1Coutts) August 13, 2024

Coutts expects a rise in global money supply due to the nature of the debt-based financial system, where continuous expansion is necessary to sustain existing debt.

Additionally, Coutts highlights the role of the US Dollar Index (DXY) in influencing Bitcoin’s price.

US Dollar Cycles & #Bitcoin Bull mkts. The trend support line is arbitrary. The point is that $BTC experiences the highest velocity upside move when the dollar breaks lower. If the DXY is weakening from here it’s being coordinated by the Fed and global liquidity is being… pic.twitter.com/A9ah7WYnxj

— Jamie Coutts CMT (@Jamie1Coutts) August 14, 2024

He observes that Bitcoin tends to surge when the DXY falls, as this indicates a weakening dollar, which often results from Federal Reserve actions and increased global liquidity.