According to the report, Bitcoin tends to rise when China’s broad money supply (M2) expands more rapidly than that of the U.S. The firm pointed to recent liquidity injections from the People’s Bank of China (PBoC) as a key driver behind Bitcoin’s latest upswing.
Data Snapshot
- China M2: 329.94 trillion yuan — down 0.10% month-over-month, up 8.78% year-over-year.
- U.S. M2: $22.02 trillion — up 0.63% month-over-month, up 4.53% year-over-year.
Alphractal argued that China’s stronger year-over-year M2 growth compared to the U.S. is a bullish indicator for BTC, as past cycles have shown Bitcoin benefiting from relative liquidity dominance.
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Market Sentiment Turns Cautious
Despite the positive macro backdrop, the firm warned that broader sentiment in the crypto market is sliding into bearish territory. That shift reflects lingering concerns over regulation, ETF flows, and short-term profit-taking even as long-term liquidity signals remain favorable for Bitcoin.
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