Is the opportunity to buy Bitcoin at the bottom? Talk with data charts

Author: Crypto Stream

Compiled: Tim, PANews

Is it the best time to buy Bitcoin at the bottom?

The market plummeted 10% overnight, completely offsetting the rising effect of US cryptocurrency strategic reserves. Retail investors are selling in panic and market sentiment has dropped to freezing point. But the actual situation may be better than the surface. Here is my market view:

Why can the global M2 money supply drive Bitcoin to rise?

Bitcoin is extremely sensitive to changes in global money supply. As the "most sensitive asset" of liquidity changes (the term is proposed by CrossBorder Capital, a global liquidity research firm), experts estimate that it is correlated with the money supply by as much as 40%.

Analysis of the current trend of M2 money supply:

M2 supply bottomed out around January this year. Historical data shows that the impact of M2 on Bitcoin price has a lag effect of 40-70 days. This means that its bottoming out liquidity will likely drive Bitcoin to rise in the medium term, and this transmission mechanism may appear as soon as 20 days.

Analysis on the impact of tariff policies on the market

The trade war panic is impacting the market, and the decline in risk appetite in the United States poses significant negative for risky assets. But I think the impact of tariffs has been fully digested by the market, and the primary verification indicator is the flow of ETF funds:

Changes in ETF capital flow and market expectations

Currently, ETF capital outflows have slowed down significantly. Institutional investors have basically completed pricing on the impact of tariffs last week, and it is expected that there will be no larger withdrawal of funds this week. It is worth noting that the market has shown signs of buying on dips.

Analysis of the sell-off crowd

The current selling pressure mainly comes from two major groups: one is retail investors who sell panic, and the other is institutional players who are prepared for it. It is worth noting that retail investors may have misjudgment expectations for policy delays.

Technical analysis of CME futures gap

Another potential negative factor is the CME Bitcoin futures gap. This phenomenon refers to the gap formed between the spot price of Bitcoin and the opening price of futures after the CME exchange is closed on the weekend. Although the gap does not necessarily trigger immediate selling, the common psychological expectation of "gap must be filled" by traders will aggravate short-term selling pressure. It is worth noting that the technical gap has been completed on March 4, and this influencing factor has been eliminated from the current price equation.

Based on the above analysis, we can summarize the three core drivers that caused yesterday 's price fluctuations:

• Insiders short after the announcement is released

• Long positions are forced to close

• A large influx of newly opened short positions

Finally, I think there are not many negative factors left at present, so we can focus on the positive news that may come on March 7.

BTC prices have fallen back to the level before the announcement, and I think buying at the current price has an excellent risk-reward ratio.