- Global M2 liquidity has surged since mid-2025, fueling strong gains in gold while Bitcoin remains stagnant, awaiting momentum rotation.
- Historical cycles show Bitcoin typically lags during liquidity expansions before rallying sharply once risk appetite and market liquidity align.
- Analysts view Bitcoin’s consolidation as a coiled-spring setup, where rising liquidity eventually triggers a forceful upside reaction across crypto markets.
Bitcoin is lagging behind global liquidity and gold as global M2 surges to new highs, signaling a growing divergence between monetary expansion and digital asset performance.
Rising Global Liquidity Fuels Gold, Leaves Bitcoin Dormant
Merlijn The Trader, a well-known market analyst, noted on X that “Bitcoin is lagging behind global liquidity and gold. M2 is surging. Gold is ripping. Bitcoin is sleeping. This divergence never lasts.” The statement reflects a widening gap between liquidity growth and Bitcoin’s current stagnation.
The chart shared by Merlijn shows M2 Global Liquidity sharply increasing since mid-2025, a move that often precedes rallies in risk assets. Gold has already reacted, soaring while investors position against potential currency dilution. Meanwhile, Bitcoin is in a deep consolidation period now on the outskirts of a favorable macro backdrop.
Historically, rising liquidity has been the key catalyst for speculative markets. Each prior cycle has shown the same sequence: M2 expands, gold rallies, and Bitcoin follows with stronger momentum. The current pattern suggests that Bitcoin may again trail before catching up once liquidity begins rotating toward higher-yield assets.
Liquidity Rotation Could Trigger a Bitcoin Catch-Up Rally
Merlijn emphasizes that Bitcoin’s muted response is not a sign of weakness but a temporary phase before a major move. As liquidity expands, it naturally flows into risk assets, and Bitcoin — being the most responsive among them — tends to react later but more aggressively.
Gold’s surge amid the same liquidity wave indicates that capital is already moving toward inflation-resistant stores of value. Bitcoin’s lag, therefore, may represent a period of accumulation before renewed volatility. The divergence between M2, gold, and Bitcoin suggests the digital asset is coiling for a possible breakout once liquidity spillover reaches crypto markets.
Every previous cycle has shown liquidity chasing yield after gold peaks. As central banks continue expanding balance sheets, Bitcoin’s delayed reaction could set the stage for a sharp upside move. Merlijn concluded that the current setup resembles a “coiled spring,” where rising global liquidity eventually fuels Bitcoin’s next explosive phase.
The growing gap between liquidity and Bitcoin performance may therefore be short-lived, as market history repeatedly shows that liquidity always finds risk.
