Bitcoin may reach $200k if this liquidity trend continues.

Bitcoin is back in the spotlight. As of now, the price of BTC is trading around $117,528, up 2% in the last 24 hours. However, a larger trend is quietly forming.

The global M2 money supply (, a measure of global liquidity ), is increasing again. History shows that Bitcoin prices often follow the trend of M2, with a lag of about 10 weeks.

Currently, BTC is moving in phase with M2 and that could push the price of Bitcoin towards a new target of 200,000 dollars. The on-chain indicators are clearly supporting this scenario.

M2 Liquidity and Profit Signals are Turning Green

The M2 money supply continues to increase. This is important because abundant liquidity often leads to higher demand for Bitcoin. According to data from CryptoRank, M2 has surpassed 112 trillion dollars and BTC is expected to reach 200,000 dollars by September.

This is also the model that helped Bitcoin break through at the beginning of 2024, showing that there is still growth potential if the money supply continues to expand.

Correlation between M2 – Bitcoin | Source: CryptoRankThe M2 index measures the total amount of cash, savings, and short-term deposits circulating in the global economy. When M2 increases, more money will flow into assets like Bitcoin.

That's why traders are closely monitoring this index. If you had to choose one macro factor that has the greatest influence on Bitcoin right now, it would be M2.

Bitcoin holders also appear to be quite confident. The SOPR index (, the realized profit ratio, is currently above 1, indicating that the majority of BTC being traded on-chain is still being sold at a profit.

With SOPR fluctuating around 1.02, this indicates that holders are not panicking. They are taking profits in a controlled manner, rather than selling off. This is behavior commonly seen in the early stages of a bull cycle.

![Bitcoin ])https://img-cdn.gateio.im/webp-social/moments-167464bd2556fa0117cfd73b419217df.webp(SOPR Bitcoin | Source: CryptoQuantThe SOPR index helps us understand more about the profit-taking behavior. When SOPR is above 1, it means investors are selling to take profits. Conversely, when it is below 1, they are selling at a loss to cut losses.

Currently, Bitcoin traders are making profits and waiting for higher prices. This reinforces the argument that the bullish trend may continue.

Investors increase leverage with bullish positions

The futures contract data also supports this assessment. The open futures contract )OI( for Bitcoin has now surpassed the threshold of 84.2 billion dollars. This indicates that capital is flowing strongly into the futures market for Bitcoin.

Thus, traders are betting heavily on the possibility that the price of Bitcoin will continue to rise. This is also the highest OI in recent weeks.

![])https://img-cdn.gateio.im/webp-social/moments-13cdcac1627ea68a76a701ac7a97f9e6.webp(The price of Bitcoin is high | Source: CoinglassAt the same time, the funding rate )funding fee( remains positive, indicating that more traders are opening Long positions than Short.

On July 24, the funding rate of BTC reached +0.0119%, according to data from Coinglass. This indicates that bullish traders are still controlling the derivatives market.

However, this figure does not reflect excessive leverage usage, implying that the price increase story based on M2 is not merely speculative but also supported by solid fundamental factors.

![Bitcoin ])https://img-cdn.gateio.im/webp-social/moments-f1fe64806a0b62c2fb503727270451ac.webp(Funding rate according to OI Bitcoin weighting | Source: CoinglassWhen the M2 money supply expands, traders seem more confident in increasing their exposure to the market. This indicates that the current positions are supported by real liquidity, not just media effects or short-term speculation.

Moreover, the demand for buying Bitcoin is actually increasing. In other words, if the price rises, it could be due to the spot market driving it.

The OI of futures contracts tells us the leverage currently present in the system – the higher the number, the more "big bets" are being placed.

The funding rate indicates who is paying whom. If the funding rate is positive, those holding Long positions are paying fees to Short positions, meaning the majority of traders are betting on an upward trend.

In summary, these indicators show that traders are expecting the price of Bitcoin to rise. However, if the price drops too quickly, the market may witness some liquidation events. But at this moment, the momentum is still leaning towards the bulls.

Stablecoin reserves and Bitcoin price charts both indicate a target of 200,000 dollars

Signals from the spot market are also becoming positive. The total stablecoin reserves on exchanges are currently high, around 47 billion dollars — an important factor as stablecoins are often used to purchase crypto.

High stablecoin reserves indicate that capital is ready to act, suggesting that investors are waiting for a "buy the dip" opportunity.

!)[bitcoin]https://img-cdn.gateio.im/webp-social/moments-4e09bbb87294e154cfa8c020f54f64b3.webp(The reserves of cryptocurrency or stablecoin are increasing | Source: CryptoquantThis accumulation trend often occurs during the M2 expansion phase, when cash is injected into the market before deployment.

![Bitcoin ])https://img-cdn.gateio.im/webp-social/moments-24b04ad5587bf96bc2f61be5d9f84e27.webp(The outflow of Bitcoin is increasing | Source: CoinglassThe outflow of Bitcoin from exchanges is another positive signal indicating investor confidence. When BTC leaves the exchange, it usually means that holders are transferring assets to long-term storage wallets, reducing selling pressure and potentially supporting price increases.

In the past week, the amount of BTC withdrawn from exchanges has exceeded the amount deposited. When observing the Bitcoin price chart, the Fibonacci extension levels serve as a guiding map. The Fibonacci level of 3.618 corresponds to a price range near $200,000 and this is often a long-term target in strong upward trends.

![Bitcoin ])https://img-cdn.gateio.im/webp-social/moments-7768db20d2ee298e5af57dcd71aa12e2.webp(Bitcoin Price Target | Source: TradingViewWith the current price holding above $116,000, the opportunity is clear. If liquidity continues to rise and traders remain confident, the $200,000 level could appear in the coming months.

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