Bitcoin is heading towards the $170K mark as global M2 supply hits a record high

Bitcoin may be on track to reach the milestone of $170,000 as global liquidity ( measured by the money supply M2) hit a new record of $55.48 trillion on July 2.

The BTC price chart and M2 adjusted according to USD | Source: TradungView/Caleb Franzen## Bitcoin often follows the breakout trend of the M2 index

The M2 liquidity index adjusted for USD from major economies such as the US, the eurozone, Japan, the United Kingdom, and Canada.

When M2 increases, it indicates that there is more money circulating in the economy, including money in bank accounts, demand deposits, and other liquid assets. This excess liquidity often drives capital flows into riskier assets, such as cryptocurrencies.

History shows that Bitcoin typically has a delay of about 3 to 6 months compared to fluctuations in the global M2 index and the M2 of the United States, especially during periods of strong changes in liquidity. In some cases, such as the breakout above the $100,000 mark in April 2025, this delay only lasts from one to two weeks.

Daily BTC price chart | Source: TradingViewAlthough BTC may still rise during the slow growth phase of M2, such increases are often not sustainable.

Conversely, price increases supported by the expansion of M2 often create longer-term and more stable upward trends, indicating that the current cycle may be driven by actual liquidity rather than just speculation.

"As the global money supply continues to expand, Bitcoin's next target will be around ~170,000 dollars, according to liquidity flows," analyst Crypto Auris commented.

Many analysts also predict that the price of BTC could reach the range of $150,000 to $200,000 by the end of 2025, thanks to the increasing demand from financial institutions through ETFs and large corporations.

Accumulated cash flow of Bitcoin spot ETF | Source: Farside Investors## USD weakness paves the way for Bitcoin's uptrend

The demand for Bitcoin is increasing in the context of the weakening US dollar.

The USD Index (DXY) has decreased by 10.8% in the first half of 2025, marking the worst first half performance since the Bretton Woods system collapsed in 1973.

Daily performance of BTC and DXY | Source: TradingViewConversely, Bitcoin increased by 13.25% during the same period, indicating an inverse correlation with the US dollar. Historically, strong divergences between Bitcoin and the dollar often signal important trend reversal points.

In April 2018 and March 2022, when the DXY index rose while BTC fell, the market entered a bear cycle. Meanwhile, this divergence in November 2020 marked the beginning of a major price increase.

BTC and DXY Monthly Performance | Source: Justin WuIn the current cycle, BTC and the DXY index have almost moved in parallel until the beginning of 2024. A clear divergence begins in April 2025, when DXY falls below the 100 mark for the first time in two years.

If past patterns repeat, this could be the signal for the start of a new upward trend for Bitcoin. The prolonged weakening of the USD could amplify this increase, going beyond the usual behavioral patterns in previous cycles of Bitcoin.

Minh Anh