BTC price slumps to $62K as Bitcoin bulls bet on M2 money supply

Bitcoin (BTC) sought to reclaim $62,000 on Aug. 3 as markets inched higher after a fresh liquidation cascade.

BTC price tests $60,000 in stocks sell-off

Data from Cointelegraph Markets Pro and TradingView showed a 3% BTC price rebound taking shape after fresh multi-week lows of $60,435 on Bitstamp.

These accompanied a grim day for stocks worldwide, with the Nikkei’s 6% drop setting the scene for more losses on Wall Street. United States employment data, which fell far short of expectations, exacerbated the sense of panic.

Bitcoin itself lost nearly $5,000, giving up several key support lines, including the short-term holder cost basis.

Liquidations mounted as a result, with data from monitoring resource CoinGlass putting the total crypto longs wipeout at $230 million for both Aug. 1 and Aug. 2.

“The Yields are falling off a cliff in the U.S. markets as the job reports came in astonishingly bad,” Michaël van de Poppe, founder and CEO of trading firm MNTrading, wrote in a reaction on X.

“Slight panic across the board, as the markets are pricing in a substantial recession for the U.S.”

Van de Poppe argued that recent events had likely cemented the likelihood of the Federal Reserve cutting interest rates — a key bullish catalyst for crypto and risk assets — at its next meeting in September.

“One thing is for certain: Rate cuts for September are confirmed,” he concluded.

Trading resource The Kobeissi Letter meanwhile summarized the macroeconomic landscape as full of mixed signals.

“Yesterday, the discussion was whether a September rate cut was coming or not. Today, the discussion is whether the rate cut will be 25 basis points of 50 basis points,” part of its latest X coverage explained.

Data from CME Group’s FedWatch Tool put market odds of a smaller 0.25% cut at 78% on the day.

Global liquidity offers Bitcoin bull case

Bullish perspectives on Bitcoin remained in play despite the market shock.

Jeff Ross, founder and managing director of hedge fund Vailshire Partners, suggested that rising global liquidity would buoy BTC price action going forward.

Ross uploaded a chart to X comparing the global M2 money supply to BTC/USD and the latter’s 50-week and 200-week simple moving averages (SMAs).

“A reverse head-and-shoulders forming for bitcoin (on the weekly chart) in the setting of increasing global M2 money supply? Would be uber bullish from a combined TA and liquidity perspective,” part of accompanying commentary read.

Even before the bulk of the comedown, Cointelegraph reported on increasing expectations among traders that Bitcoin would retest the bottom of its long-term trading range.

“Bitcoin Has now been trading in this range for more than 5 months,” popular trader Daan Crypto Trades noted.

“We've been seeing lower lows and lower highs as the range has been going on. Key levels remain $59K & $74K for the lows and highs.”