Global Liquidity Says Bitcoin Is Extremely Undervalued – Here’s The ‘Real’ Figure

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Crypto pundit Kyle Chassé has pointed to the rising global liquidity to prove that Bitcoin is currently undervalued. His comments come as fiat currencies like the Dollar and Yen continue to weaken amid concerns about governments’ fiscal policies.  Global Liquidity Points To A Bitcoin Target Of $270,000

In an X post, Kyle Chassé shared an accompanying chart highlighting a Bitcoin target of $270,000 based on rising global liquidity. The pundit stated that the herd says that $90,000 BTC is expensive, but that the fiat ledger has reminded everyone why the digital ledger exists. This came as he revealed that the global M2 money supplyhas hit a record $98 trillion, driven by aggressive expansion from the U.S., the Eurozone, China, and Japan.  Related Reading Bitcoin Price Following The 2022 Fractal? Here Was The Previous Outcome 4 days ago

Chassé further noted that year-to-date (YTD) global liquidity growth is now 6.2%, the fastest pace since the 2020 pandemic response. The pundit warned that in a system where the fiat denominator is permanently diluted, fixed-supply assets are not going up in price, but that cash is “loudly becoming worthless.” As such, he believes that BTC is a good hedgeagainst currency debasement and potentially inflation.  Source: Chart from Kyle Chassé on X

The pundit’s comments notably come amid a decline in the dollar, with the DXY down since the start of the year. The yen is also down YTD, as these fiat declines are coming amid a push by the governments to increase spending. Increased government spending is considered bullish for Bitcoin, given its fixed supply compared to fiat currencies, which governments continue to print. BitMEX co-founder Arthur Hayeshad also recently predicted that a rise in dollar liquidity would spark higher BTC prices. 

However, that is yet to be the case as Bitcoin continues to trade like a risk asset and has erased its year-to-date (YTD) gains amid political tensions in the U.S. A U.S. government shutdown is also looking more likely by January 31, sparking a BTC drop below $87,000 yesterday.  BTC Will Rise Once Liquidity Returns

Crypto pundit Merlijn assured that Bitcoin will rise once liquidity comes back. In an X post, he urged market participants to zoom out and that the BTC pattern would become obvious. The pundit revealed that the flagship crypto has already recorded waves 1, 2, and 3 with lower highs, which signal trend fatigue.  Related Reading Here’s Why The Bitcoin, Ethereum, And Solana Prices Are Still Crashing Hard 3 days ago

Now, Bitcoin is looking to form waves 4 and 5, which would signal a reset, absorption, and base building. Merlijn suggested that the bottom may not yet be in, but that once that happens, BTC could rally to as high as $124,000, bringing it close to its current all-time high (ATH)of $126,000. 

At the time of writing, the Bitcoin price is trading at around $87,700, down in the last 24 hours, according to datafrom CoinMarketCap. BTC trading at $88,084 on the 1D chart | Source: BTCUSDT onTradingview.com Featured image from Pngtree, chart from Tradingview.com