Analysts Predict Bitcoin Surge Post-March

If two stable correlations persist, Bitcoin may begin to recover in the second quarter. This is according to CNBC, citing Wells Fargo equity analyst Christopher Harvey.

The expert highlighted the positive correlation between the leading cryptocurrency’s prices and the growth of the money supply (M2), and the negative correlation with the dollar index.

“Bitcoin has consistently tracked the inverted DXY trend with about a 10-week lag,” Harvey noted.

According to him, the current dip in cryptocurrency is a reaction to the strengthening of the dollar in the fourth quarter of 2024. The DXY index peaked on January 13, and since then the American currency has weakened, the expert emphasized.

Compass Point analyst Ed Engel also noted these correlations. The global M2 aggregate peaked at the end of September. Liquidity then contracted, but after hitting a low at the beginning of the year, it recovered.

“If Bitcoin maintains its correlation with M2, this would imply further weakening in March before a significant rally in the second quarter of 2025,” Engel stated.

Wolfe Research was less optimistic about the outlook. The company’s specialists noted uncertainty with industry regulation and macroeconomic risks such as trade wars.

In their assessment, a move above the $91,000-$92,000 range could serve as a positive signal in the near term. However, it is likely that prices will not overcome the key resistance at $90,000, and Bitcoin will remain in a state of “sustained weakness.”

“We simply do not see an environment capable of supporting a significant reversal in cryptocurrency,” Wolfe Research experts concluded.

Earlier, options traders placed $550 million on further weakening of Bitcoin in March. Some analysts suggest that the price could drop to $70,000 before a subsequent rise.