Ideally, BTC should have completed the red W-iv and is about to commence the red W-v, preferably to $166K. In previous updates, we have shown why we prefer that target (spoiler alert: it is based on Fibonacci extensions). At last week’s low, BTC did an almost perfect 38.2% retracement of the red W-iii, a common target for a 4^th wave. Besides, the previous (green) 3rd wave high was successfully retested at that low. Thus far, it is classic technical behavior. Further support is a little lower, between $68,500 and $71,500.

Money Makes the World Go Round

To supplement the EW count, we can look at other vital indicators. In this case, liquidity. It drives markets, i.e., how much is there and how much it wants to be put to work in the financial markets. We can easily quantify the former, which we have done here. We overlaid BTC’s price action since its low in 2022 with Global M2 Money Supply (GMS) as per Collin Talks Crypto (@CollinTCrypto), using a 98- and 112-day offset. See Figure 2 below. Bitcoin’s daily price action is in white, and the GMS is in blue and yellow, respectively.