Bitcoin price prediction: BTC downside targets $110,000 amid M2 liquidity divergence

Traders Union
All News
Crypto
BTC downside bias grows toward $110,000

All news

Top Stories

Editors' Picks

Stocks

Crypto

Financial News

Currencies

Commodities

Companies

Central Banks

Sholanke Dele

25.09.2025

Bitcoin price prediction: BTC downside targets $110,000 amid M2 liquidity divergence — Bitcoin faces sell-side liquidity risks

Bitcoin is once again under pressure after failing to sustain its midweek recovery. The cryptocurrency is trading near $111,600 in Thursday’s European session, down 1.5% on the day, as sellers took control and erased Wednesday’s brief rebound. The weakness comes in the context of a broader disconnect between Bitcoin and global money supply.

• Bitcoin rebound reverses near $111,600 as money supply divergence weighs heavy.

• BTC rejection at 50-day EMA reinforces bearish pressure toward $110,000 handle.

• Sell-side liquidity build-up highlights downside risk despite rising global money supply.

The M2 measure of liquidity, which captures cash, deposits, and short-term investments, reached an all-time high of $22.2 trillion in the United States this week, according to the Atlanta Federal Reserve. Historically, expansions in money supply tend to support risk assets, including crypto. Yet Bitcoin has lagged this relationship by about seventy days, a rare divergence not seen since May. By contrast, gold has maintained its close alignment with money supply growth, raising questions about Bitcoin’s role as an inflation hedge.

Bitcoin price dynamic (Aug - Sept 2025). Source: Tradingview

Instead of trading as a safe haven, Bitcoin has been behaving more like a high-risk technology stock. Liquidity conditions that would normally provide a tailwind have not translated into sustainable demand for the cryptocurrency. Earlier in the week, a liquidity flush pressured price lower, and the market has struggled to recover since. Wednesday’s upside attempt stalled at the 50-day EMA, which also coincided with the 38.3% Fibonacci retracement level, reinforcing the technical ceiling that capped the rebound.

Bitcoin divergence from money supply raises doubts over inflation hedge status

This rejection has left market structure tilted toward further downside. BTC pullback has shifted focus back to the early week lows at $111,000 and $110,000, where a build-up of sell-side liquidity is likely to be tested. Traders are closely watching these levels as potential inflection points for either a stabilization attempt or a continuation of bearish momentum.

The divergence from money supply growth reveals that Bitcoin has failed to attract flows, highlighting investor preference for equities and gold under current macro conditions. Secular dollar weakness and persistent geopolitical risks have historically favored Bitcoin, but the present lag suggests sentiment is skewed toward viewing it as a speculative growth asset rather than a hedge.

Until Bitcoin can reclaim key resistance levels above the 50-day EMA, near-term bias will remain defensive. The path of least resistance points to further tests of downside liquidity, keeping the $110,000 handle in focus as the market gauges whether fresh demand emerges or whether selling pressure extends the drawdown.

Bitcoin tests 100-day EMA support as momentum signals stronger downside pressure. BTC RSI confirms bearish shift, while fear index points toward weakening sentiment.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.