Market analysts are closely watching the growth of the M2 money supply in the United States, believing it could hold the key to triggering further upward momentum for Bitcoin. Historically, the expansion of the M2 money supply has been correlated with previous Bitcoin price bull runs, prompting experts to speculate on its potential impact on the cryptocurrency's future trajectory.

According to Jamie Coutts, chief crypto analyst at Realvision, the growth of the M2 money supply could catalyze the next bull run for Bitcoin. Coutts highlights the strong correlation between M2 money supply growth and Bitcoin bull cycles, emphasizing its significance in his Bitcoin/Liquidity framework. He notes that of the major metrics he tracks, Global M2 appears to capture the majority of Bitcoin's movements. Moreover, Coutts suggests that the rate of change in the money supply holds more importance for Bitcoin price than its nominal value, indicating that shifts in M2 momentum often coincide with movements in Bitcoin's price.

Recent data showing a positive year-over-year growth in the M2 money supply since November 2023 signals to investors that they may seek hedges against inflation, such as Bitcoin. Additionally, Coutts points out that the price action of the U.S. dollar could further influence Bitcoin's price, particularly if the dollar breaks below the 101 mark.

On May 16, Bitcoin broke its month-long daily downtrend, according to popular crypto analyst Rekt Capital. This breakout suggests a potential shift towards an uptrend, with Bitcoin recording its first Higher High since bottoming at $56,000. However, the relative strength index (RSI) peaked at 77 before retracing to 66, indicating that Bitcoin may need to stabilize further before experiencing significant upside momentum.

Despite the positive momentum, Bitcoin faces substantial resistance around the $66,500 mark. A potential move above this level could trigger the liquidation of over $111 million worth of leveraged short positions across all exchanges, according to Coinglass data.

As analysts monitor the dynamics of the M2 money supply and Bitcoin's price movements, the cryptocurrency market remains poised for potential developments that could shape its future trajectory.