Bitcoin Price Analysis Suggests Sharp Rebound as BTC Falls Below Global Liquidity Fair Value

Bitcoin is trading far below what some analysts believe is its fair market value, raising expectations of a possible sharp rebound. Market observers tracking Bitcoin against global M2 money supply data argue that the cryptocurrency is now deeply undervalued compared to historical liquidity trends.

Bitcoin appears “massively below” its fair value when measured against global liquidity and the Bitcoin to gold ratio. According to market data, the BTC/XAU ratio has dropped well below its expected range and reached a negative Z-score close to -2, a level rarely seen before.

Why Global M2 Supply Matters for Bitcoin

Global M2 money supply measures cash and liquid assets circulating in the economy. Historically, Bitcoin has often moved higher during periods of rising liquidity, although price reactions do not always happen immediately.

Analysts Split on Bitcoin Rebound Outlook

Some analysts believe the current disconnect could lead to an aggressive Bitcoin recovery. However, critics argue the M2 model has flaws, pointing to delayed market reactions and Bitcoin’s traditional four-year cycle as stronger indicators of price direction.