Bitcoin Squeezed Between Record Money Supply and $106K Ceiling—Will the Dam Break?
Bitcoin's price action has turned into a high-stakes tug-of-war. On one side: a historic flood of M2 money supply screaming 'inflation hedge.' On the other: stubborn technical resistance at $106,000 that's laughing at bulls like a Wall Street banker at a crypto conference.
The setup couldn't be more dramatic. Global liquidity is hitting all-time highs—the kind of environment where Bitcoin traditionally thrives. Yet the king of crypto keeps bouncing off that psychological barrier like a day trader hitting margin calls.
What gives? Either we're witnessing the mother of all spring-coil setups, or the market's waiting for some suit at the Fed to sneeze wrong. Place your bets—just maybe keep some dry powder for when the 'efficient market' remembers its lines.
- The U.S. M2 money supply topped out at $21.86 trillion, further bolstering Bitcoin’s appeal as an inflation hedge.
- Bitcoin was rejected at $106k and could fall to $100k or even below to fill in as the consolidation continues.
- The exchange’s reserves are dropping quickly, though CME exposure is still low, and SSR keeps increasing.
U.S. M2 money supply has broken out to all-time highs of $21.86 trillion, leading to calls for higher inflation and reaffirming Bitcoin’s status as a hedge against fiat debasement. The adoption of Bitcoin as a store of value has also been assisted by the sharp rise in dollars in circulation, which relates to Bitcoin’s long-term value proposition by acting as a protection against future monetary dilution.
BREAKING
THE U.S. M2 SUPPLY HAS HIT A RECORD HIGH OF $21.86 TRILLION
THE GOVERNMENT IS PRINTING LIKE CRAZY
BITCOIN WILL PUMP HARD
pic.twitter.com/ePKlhTphIv
Bitcoin is now trading above $105,600 but failed to hold above $106,000. Even though the macro backdrop remains bullish, short-term signals are getting bearish. Michael van de Poppe and CrypNuevo pointed to a rejection at $106k, with potential downside targets at $100k and the 150-day exponential moving average. However, if prices fall below the $100K level, AlphaBTC said prices could drop as low as $90,000.
Exchange Reserves Collapse as Market Faces Liquidity Tension
Bitcoin exchange reserves sink from over 3.4 million BTC in mid-2022 to 2.3 million by June 2025, onchain data from CryptoQuant shows. Centralized platforms’ steady outflow indicates that investors are more inclined towards longer-term holding, thereby removing a source of potential selling pressure and decreasing balance sheet supply.
However, the Stablecoin Supply Ratio (SSR) has risen to 17.6. This implies a reduction in stablecoin liquidity relative to Bitcoin’s market cap, which WOULD cap any upside from buying on the spot. Accumulation is high, while fresh capital inflows may slow, contributing to sideways price action.
Strong unrealized profit stacking behavior among holders is shown by the MVRV ratio rising to 2.24. Such levels historically have preceded short-term corrections. While not yet at overheated peaks seen in past bull cycles, the metric advises caution for new buyers investigating today’s price levels.
CME Data, Offshore Derivatives Paint a Split Market Picture
However, Bitcoin’s exposure on the Chicago Mercantile Exchange (CME) has arisen slightly but remains far below old highs. According to K33 Research, institutional players are restrained, and Leveraged ETF exposure has been down over 23,000 BTC since the December peaks. Additionally, direct participant engagement lags behind earlier highs, showing participant preference to watch and wait for the June 18 FOMC meeting.
On the other hand, offshore derivatives are booming in trading. bitcoin perpetual contract open interest has returned to late 2023 levels. However, the lack of a clear direction of the funding rate reveals that indecision abounds. Such a disposition of the market risks creating volatile liquidations as traders are also on both sides of the market.
Technical indicators are equally neutral. The MACD shows flattening momentum while RSI is NEAR 60 indicating not overbought conditions. BTC is expected to consolidate further without a breakout, without stronger macro or on-chain confirmation.
