Global M2 money supply remained above $120 trillion as of July 13, though short-term liquidity showed signs of contraction, according to data from BGeometrics. The total stood at $120.2198 trillion, down approximately 0.11% from $120.3490 trillion the prior week. Despite the weekly dip, the annual growth rate edged higher to 6.40%, up from 6.28% the previous week, indicating that the longer-term liquidity expansion continues.
M2 and Bitcoin Correlation
M2, a broad measure of money supply that includes cash, demand deposits, and easily liquidated assets like short-term time deposits and money market funds, is closely watched as a proxy for global liquidity. Bitcoin has historically shown a strong correlation with M2, often reflecting changes in liquidity with a lag of about 10 weeks. The current M2 level above $120 trillion suggests ample liquidity in the global financial system, which could support risk assets over time.
On-Chain Metrics Show Mixed Signals
Market health indicators from on-chain data reveal a neutral stance overall. The MVRV Z-Score, which compares Bitcoin's market cap to its realized value, stood at 0.31, down from 0.36 the prior week. This remains within the neutral zone (0–2), signaling neither overheating nor extreme undervaluation. Meanwhile, the 1+ Year HODL Wave rose to 62.57% from 61.93%, indicating that long-term holders are accumulating or holding, with supply locked up at elevated levels.
Spot ETF Outflows Persist
In the U.S. spot ETF market, outflows continued. On July 13, Bitcoin spot ETFs saw a net daily outflow of $424.66 million, while Ethereum spot ETFs recorded $15.41 million in net outflows. This selling pressure contrasts with the broader liquidity picture, suggesting short-term caution among institutional investors despite the overall expansion in global M2.