Will Bitcoin Drop to $70k?

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Hey Degens,

Ready to dive into another action-packed week in crypto? We’ve got plenty to catch up on, from the global M2 money supply's latest moves to the potential for massive crypto-friendly reforms. Let’s break it all down.

Here’s what we’re covering today:

• Global M2 vs. Bitcoin: Why it matters and what’s next.

• Gary Gensler’s SAB 121: Trump’s plans to axe it and what it means for crypto.

• Bitcoin Price Analysis: Could BTC really drop to $70K? Let’s unpack the data.

But first, take a look at ValutCraft

VaultCraft launches V2, TVL skyrockets above $100M

VaultCraft launches V2, partners with Safe, and secures $100M+ in Bitcoin

• Matrixport, Asia’s leading crypto providers, commits $100M+ in Bitcoin

• OKX Web3 to launch Safe Smart Vaults with $250K+ in rewards

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Let’s get into it!

Global M2 vs. Bitcoin: A Match Made in Chaos 🥊

The Global M2 Money Supply (a measure of physical cash, bank deposits, and money market funds) is shrinking—and that’s not great news for Bitcoin in the short term. Historically, BTC has followed M2 trends with a 70-day lag, meaning if M2 is down now, Bitcoin could follow suit.

But don’t panic yet:

• What could reverse the trend? Liquidity injections. With the U.S. government likely printing cash and slashing rates later this year to refinance its COVID-era debts, BTC could see a bullish turnaround.

• Why this matters: Bitcoin thrives in a world of loose monetary policy. Keep an eye on Uncle Sam’s moves—they could be the catalyst for the next leg up.

Gary Gensler’s SAB 121 Is (Finally) on the Chopping Block 🪓

Crypto got a curveball last year with SAB 121, an SEC rule that forced institutions holding crypto to treat it as liabilities on their balance sheets. Translation: it scared traditional finance away from crypto custody.

Here’s the good news: Trump is reportedly ready to kill SAB 121 on Day 1 of his presidency, potentially unlocking a wave of institutional adoption.

• Why this matters: Financial institutions could get the green light to custody crypto without the accounting red tape.

• Takeaway: More institutional trust means more money flowing into the market. Cue the bullish vibes.

Bitcoin Price Analysis: $70K Incoming?

Bitcoin has had a turbulent start to the year, hovering around $96K after recovering from a dip below $90K. But analysts warn of a potential drop to $70K, citing:

• Profit-Taking: Smart money is locking in gains after BTC’s recent rally.

• Macro Headwinds: Inflation fears and a strong USD are putting pressure on risk assets like Bitcoin.

• On-Chain Data: Metrics like the MVRV ratio and realized profit/loss suggest a cooling period.

What to Watch:

• Key support levels: $86K, $76K, and finally $70K.

• Trump’s inauguration: Could pro-crypto policies reignite momentum?

• Long-term perspective: Even if BTC dips, it’s likely a breather in the broader bull market.

Final Thoughts: Play the Long Game

This week reminds us that crypto isn’t just a market—it’s an evolving story. While the short-term looks shaky, the long-term narrative is solid. Whether it’s regulatory clarity, institutional adoption, or macro trends, the building blocks for a bright future are falling into place.

Stay sharp, stay curious, and keep stacking.

Cheers,
The DegenDen Team

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