Key takeaways:
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Bitcoin could target $170K as global M2 money supply hits a record $55.48 trillion.
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BTC price historically lags M2 breakouts, with past patterns suggesting imminent upside.
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A weakening US dollar adds fuel for BTC bulls, with DXY down 10.8% in H1 2025.
Bitcoin (BTC) could be on track to reach $170,000 as global liquidity, measured by broad money supply (M2), hits a new record high of $55.48 trillion on July 2.
Bitcoin typically follows the M2 breakout
M2 aggregates US dollar-adjusted liquidity from the US, eurozone, Japan, the UK, and Canada.
When M2 rises, it indicates that more money is circulating in the economy, including in bank accounts, checking deposits, and other liquid assets. Such surplus liquidity can increase capital flowing into “riskier assets” like crypto.
Bitcoin has historically followed global and US M2 supply with a 3–6 month lag, especially during liquidity shifts. In some cases, like the April 2025 breakout above $100,000, the lag was just 1–2 weeks.
While BTC has rallied during low M2 growth, such moves often prove unsustainable.
In contrast, M2-driven rallies tend to produce longer, more stable uptrends, suggesting the current cycle may be supported by real liquidity, not speculation.
“As global money supply expands, Bitcoin’s next target sits around ~$170K, following the flow,” says analyst Crypto Auris.
Multiple analysts have predicted the BTC price to reach the $150,000-200,000 range by the 2025’s end, owing to rising institutional demand via ETFs and corporations.
Weakening USD puts Bitcoin rally in play
The growing demand for Bitcoin appears against a weakening US dollar.
The US Dollar Index (DXY) has fallen 10.8% in the first half of 2025, its worst H1 performance since the collapse of the Bretton Woods system in 1973.
In contrast, Bitcoin gained 13.25% in the same period, reflecting a negative correlation with the dollar.
Historically, major divergences between Bitcoin and the dollar have signaled key trend reversals.
In April 2018 and March 2022, rising DXY and falling BTC preceded bear markets. While the divergence in November 2020 marked the start of a major rally.
In the current cycle, BTC and DXY have moved almost in lockstep until early 2024. A clear divergence began in April 2025, as DXY fell below 100 for the first time in two years.
Related: Standard Chartered expects Bitcoin to hit new highs of $135K in Q3
If past patterns repeat, this could mark the beginning of a new Bitcoin uptrend. Prolonged dollar weakness could amplify this move beyond Bitcoin’s typical cycle behavior.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
