BTC loses correlation with global M2 – What does this mean for the price of Bitcoin?

The relationship between Bitcoin (BTC) and the global money supply M2 has long been a hot topic in the crypto community. Most analyses indicate that these two factors often trend upwards together, thereby reinforcing the optimistic argument about Bitcoin's price outlook.

However, data from September shows that BTC may no longer maintain a strong correlation with M2. So how do analysts assess this change?

Bitcoin decouples from M2 correlation in September

According to conventional reasoning, when the M2 money supply increases, liquidity will flow into investment assets such as Bitcoin, thereby driving prices up, and vice versa.

However, analyst Colin Talks Crypto recently pointed out that this positive correlation has weakened significantly. His chart shows an increasing divergence between the price of Bitcoin (lagging) and the global money supply M2 (with an 80-day shift).

Bitcoin Price and Global M2 Money Supply | Source: Colin Talks CryptoNotably, this is the weakest correlation phase since the launch of Bitcoin Spot ETFs in January 2024 – a time when both indices moved closely together.

Colin also noted that in the previous three bull cycles, the correlation between BTC and M2 was broken as the market approached its peak. He commented that a similar situation might be repeating itself, implying that Bitcoin may be nearing the peak of the current cycle, although he himself admitted that he could not be certain.

"I will continue to closely monitor the global M2. There is a possibility that the correlation will return in the next vertical surge of Bitcoin, but it cannot be guaranteed that this will happen in this cycle," Colin said.

The weakening correlation with M2 is making the investment picture more complex, especially when over the past year, this factor has been seen by many investors as an important basis for allocating BTC in their portfolios.

Bitcoin also lost correlation with stocks and gold

Not only did it decouple from M2, but Bitcoin's volatility in September also went against the trend of traditional assets such as the S&P 500, Nasdaq, and gold.

A report from CryptoQuant shows that the correlation between BTC and Nasdaq has turned negative, reaching its lowest level since September 2024. Meanwhile, by September 16, gold and the S&P 500 have continuously set new highs, while Bitcoin remains suppressed below the 120,000 USD level.

The flow of money continues to pour strongly into stocks and gold, while on-chain data reflects waning buying pressure on Bitcoin. The Trend Accumulation Score by Cohort ( from Glassnode shows that most wallet groups are exhibiting orange signals – a sign of selling pressure.

![])https://img-cdn.gateio.im/webp-social/moments-9006fc0d2e0d270fc8e796b0224b25d1.webp(Accumulation points of group trends | Source: Glassnode"Most BTC groups remain below the threshold of 0.5, indicating sustained selling pressure. No group shows strong accumulation )>0.80. The market is in a state ranging from neutral to distribution," Glassnode commented.

These signals are forcing investors and analysts to reassess the correlation factors. The slowing inflow of capital into Bitcoin raises the possibility that the market may be approaching a local peak.

Thach Sanh