The cryptocurrency market is currently stuck in a range, with Bitcoin still attempting to rise above the crucial $90k mark. Meanwhile, the majority of altcoins are trying to recover from recent losses. Experts are noticing an interesting shift, as altcoins begin to break trends and take the lead. For months, Bitcoin was the dominant force, but as it slowed down, altcoins started to drive the market’s correction.
However, Matt Bartolini, head of SPDR Americas Research at State Street Global Advisors, recently discussed risks facing the markets, especially in light of the current economic climate. Here are three key reasons why markets may be turning bearish:
Weakened Consumer Confidence: Consumer confidence dropped to its lowest point since 2021, hitting 92.9 in March. This suggests that Americans are feeling uneasy about the economy, and if spending slows down, it could hurt the market, especially in the consumer sector. Consumer discretionary stocks in the S&P 500 are down 9% this year, compared to a 2% decline in the overall market.
Bearish Positioning in Consumer Discretionary: There are signs of a bearish outlook in the consumer discretionary sector, with $800 million in outflows in March alone. Options data also shows a higher number of puts compared to calls, and short interest is rising. A lot of this bearish sentiment comes from poor performance in stocks like Tesla and broader economic factors.
Uncertainty in Economic Data: Worries over inflation and weak economic data, like GDP forecasts from the Atlanta Fed, are also affecting market sentiment. While some sectors, like healthcare and insurance, are doing better, overall economic challenges and tariff impacts are making investors more cautious. However, banks are benefiting from widening interest margins and have seen positive inflows.
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Recent analyses by crypto experts acknowledge that Bitcoin (BTC) price movements closely correlate with the global M2 money supply. Based on this, they predict potential bullish momentum for the crypto market in late March.
With global liquidity expanding, analysts predict that Bitcoin and other digital assets could experience a significant rally, starting around March 25, 2025, and potentially lasting until mid-May.
Global M2 and Its Influence on Bitcoin
The M2 money supply represents a broad measure of liquidity, including cash, checking deposits, and easily convertible near-money assets. Historically, Bitcoin has demonstrated a strong correlation with M2 fluctuations, as increased liquidity in financial markets often drives demand for alternative assets like cryptocurrencies.
Colin Talks Crypto, an analyst on X (Twitter), highlighted this correlation, pointing to a sharp increase in global M2. He described it as a “vertical line” on the chart, signaling an imminent surge in asset prices.
According to his prediction, the rally for stocks, Bitcoin, and the broader crypto market is expected to commence on March 25, 2025, and extend until May 14, 2025.
“The Global M2 Money Supply chart just printed another vertical line. The rally for stocks, Bitcoin, and crypto is going to be epic,” he suggested.
Vandell, co-founder of Black Swan Capitalist, supports that global M2 movements directly influence Bitcoin’s price. He notes that declines in global M2 are typically followed by Bitcoin and cryptocurrency market downturns about ten weeks later.
Despite the potential for short-term dips, Vandell believes this cycle sets the stage for a long-term uptrend.
“As seen recently, when global M2 declined, Bitcoin & crypto followed roughly 10 weeks later. While further downside is possible, this drawdown is a natural part of the cycle. This liquidity shift will likely continue throughout the year, setting the stage for the next leg up,” Vandell explained.
“Bottom line is: Inflation isn’t the prime topic, likely to go down. FED rate cuts. The dollar to weaken massively. Yields to fall. M2 Supply to significantly expand. And as this process started, it’s just a matter of time until altcoins and crypto pick up. Bull,” he stated.
Historical Context and Projections
The correlation between Bitcoin’s price and global M2 growth is not new. Tomas, a macroeconomist, recently compared previous market cycles, particularly in 2017 and 2020. At the time, significant increases in global M2 coincided with Bitcoin’s strongest annual performances.
“Money supply is expanding globally. The last two major global M2 surges occurred in 2017 and 2020—both coincided with mini ‘everything bubbles’ and Bitcoin’s strongest years. Could we see a repeat in 2025? It depends on whether the U.S. dollar weakens significantly,” Tomas observed.
Tomas also highlighted the impact of central bank policies, pointing out that while major banks are cutting rates, the strength of the US dollar could be a limiting factor. If the dollar index (DXY) drops to around 100 or lower, it could create conditions similar to previous Bitcoin bull runs.
Macro researcher Yimin Xu believes that the Federal Reserve might halt its Quantitative Tightening (QT) policies in the latter half of the year. Such a move, Yimin says, could potentially shift toward Quantitative Easing (QE) if economic conditions demand it. This shift could inject additional liquidity into the markets, fueling Bitcoin’s upward trajectory.
“I think reserves could get too thin for the Fed’s liking in the second half of the year. I predict they will terminate QT in late Q3 or Q4, with possible QE to come after,” Xu commented.
Tomas agreed, stating that the Federal Reserve’s current plan is to increase its balance sheet slowly, which is in line with GDP growth. He also articulates that a major financial event could trigger a full-scale return to QE.
These perspectives suggest that uncertainties remain, including the strength of the US dollar and potential economic shocks. Nevertheless, the broader consensus among analysts points toward an impending bullish phase for Bitcoin.
Investors must conduct their own research as they continue to watch macroeconomic indicators in the coming months, anticipating whether the predicted rally will materialize.
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Crypto analyst Crypto Pal has shared an ultra-bullish prediction for the XRP price and how it could rally to $10,000 thanks to its inclusion in the crypto Strategic Reserve. Meanwhile, other crypto analysts have given more conservative XRP predictions, predicting that the crypto’s price could at least reach triple digits.
XRP Price To Reach $10,000 Following Inclusion In Strategic Reserve
In an X post, Crypto Pal shared a prediction of the XRP price rallying to between $10,000 and $35,000. The analyst then asserted that the XRP Strategic Reserve will make this happen easier than ever.
US President Donald Trump recently announced XRP’s inclusion in the proposed crypto Strategic Reserve, which provides a bullish outlook for XRP. The XRP price had even surged on the back of this announcement, coming close to reaching a new all-time high (ATH).
However, despite the Strategic Reserve providing a bullish outlook for XRP, there remain doubts that this initiative could send the crypto’s price to such ambitious targets. A rally to $10,000 would put XRP’s market cap in trillions of dollars and make it worth more than the global economy, making this prediction far-fetched.
Amid this ultra-bullish price prediction for XRP, crypto analysts have offered more conservative price targets for the crypto. Crypto analyst Egrag Crypto recently predicted that Ripple’s native coin could still hit $320 between now and next year. Meanwhile, he predicted that the crypto would rally to $30 by May this year.
Crypto analyst Dark Defender also recently predicted that XRP could reach $8 irrespective of the outcome in the Ripple SEC case. However, a settlement in the Ripple lawsuit could undoubtedly spark a significant price surge for the crypto.
XRP Gearing Up For Its Next Big Leap
In an X post, Egrag Crypto stated that the XRP price is gearing up for its next big leap. He explained that the crypto is holding above critical support trend level and has successfully retested the Bull Market Support Band.
He also revealed that XRP is consolidating above the Fibonacci 0.888 level while another macro consolidation zone, the Fib 1.0 zone, is in play. The Fib 1.0 level puts XRP at $3.37. Crypto analyst CasiTrades also predicted that Ripple’s native coin could soon rally above $3 if it stays above the trendline at $2.42.
Meanwhile, Egrag Crypto predicts that there will be a “noise consolidation” for XRP between $3.40 and $2.00. Once that consolidation is done, the analyst predicts XRP’s next major leg would lead to a rally to between $8.5 and $13, which are the Fib 1.272 and 1.414 level. He also remarked that market participants should not ignore Fib 1.618 at $27.
Crypto whales look to be preparing for this parabolic XRP price rally, as they continue to move significant coins around, indicating active accumulation. Crypto analyst Ali Martinez recently revealed that over $5.37 billion worth of XRP has been transferred in the last 24 hours.
