$4.1 Trillion Liquidity Crunch Could Push Bitcoin Below $20K

• The Federal Reserve’s hawkish stance and recent interest rate cuts have dampened speculative bets on Bitcoin, with options activity for January to March sowing rising puts at $75,000–$80,000.
• Financial expert Robert Kiyosaki has highlighted vulnerabilities in global economies, predicting an imminent economic depression.

Following the all-time high of $108K last week, the Bitcoin price corrected more than 10% and is currently holding support at $95,000. Considering the global liquidity crunch, market analysts are predicting a massive correction for Bitcoin ahead all the way to the $20K level. Experts attribute this decline to the decline in the global money M2 supply that could lead to further downside pressure on BTC, reported CNF.

Here’s Why Bitcoin Price Will Crash Under $20,000

As per the latest report from The Kobeissi Letter, the Bitcoin price has followed the Global Money Supply (M2) with a 10-week lag. In the last two months, Global M2 has decreased by $4.1 trillion, suggesting that Bitcoin prices may face further declines if this trend persists.

Global M2 is a crucial economic indicator that tracks the total money supply in the global economy, encompassing cash, demand deposits (M1), term deposits, and other liquid assets. Changes in Global M2 often influence both stock and cryptocurrency markets. Based on this, The Kobeissi Letter predicted:

As global money supply hit a new record of $108.5 trillion in October, Bitcoin prices reached an all-time high of $108,000. Over the last 2 months, however, money supply has dropped by $4.1 trillion, to $104.4 trillion, the lowest since August. If the relationship still holds, this suggests that Bitcoin prices could fall as much as $20,000 over the next few weeks.

Source: Joe Consorti, The Kobeissi Letter

Last Wednesday, the US Federal Reserve announced the third interest rate cut of 25 basis points while maintaining a hawkish commentary with fewer-than-expected rate cuts in 2025 amid the sticky inflationary data. This has further dampened the speculative risk best on Bitcoin and the overall crypto market. Sean McNulty, director of trading at liquidity provider Arbelos Markets, said:

We should hold the $90,000 level for Bitcoin into the year end, but if we break below that could trigger further liquidations.

McNulty noted that “meaningful downside hedging” was observed in the options market last week, with significant purchases of January, February, and March puts at strike prices ranging from $75,000 to $80,000.

Robert Kiyosaki Warns of Impending Global Economic Crash

Renowned investor and author of Rich Dad Poor Dad, Robert Kiyosaki, has issued a stark warning about an impending global economic crash, pointing to vulnerabilities in major economies like Europe, China, and the United States. In a recent statement shared on social media, Kiyosaki predicted that a depression could be on the horizon, urging individuals to exercise caution with their finances.

“Global crash has started. Europe, China. The USA is going down. Depression ahead?” Kiyosaki questioned. In his message on the X platform, Kiyosaki encouraged followers to focus on tangible assets like gold, silver, and Bitcoin, which he believes retain their value regardless of economic conditions.

On the other hand, discussions about a strategic Bitcoin Reserve under the Donald Trump administration are catching up pace, reported CNF.