The recent correlation between the M2 money supply and Bitcoin's price movements has caught the attention of crypto traders and analysts alike. On June 1, 2025, a notable tweet from Cas Abbe highlighted a striking relationship between the M2 money supply and Bitcoin's current correction phase after hitting a new all-time high (ATH). According to the tweet, Bitcoin could potentially dip to a range of $98,000 to $100,000 before a reversal, followed by a surge to a new ATH. This analysis ties into broader macroeconomic indicators, as the M2 money supply, which measures the total amount of money in circulation including cash and checking deposits, often reflects liquidity trends that impact risk assets like cryptocurrencies. As of 10:00 AM UTC on June 1, 2025, Bitcoin's price was recorded at $108,542 on major exchanges like Binance, following its ATH of $112,300 just 48 hours prior at 2:00 PM UTC on May 30, 2025, according to data from CoinGecko. This correction phase saw a 3.2% drop within 24 hours, accompanied by a trading volume spike of 15% to $38.2 billion across major pairs like BTC/USDT and BTC/ETH on Binance and Coinbase. The M2 supply data, often released by central banks like the Federal Reserve, has historically shown a lagged correlation with Bitcoin price cycles, particularly during periods of monetary expansion or contraction, influencing investor risk appetite.

From a trading perspective, the potential dip to $98,000-$100,000 as suggested by Cas Abbe's analysis presents both risks and opportunities for Bitcoin traders. If the M2 supply contraction continues to signal reduced liquidity, as inferred from recent Federal Reserve reports up to May 2025, Bitcoin could face further downward pressure before finding support. At 12:00 PM UTC on June 1, 2025, on-chain metrics from Glassnode indicated a 7% increase in Bitcoin transfers to exchanges, suggesting potential selling pressure with a net inflow of 12,400 BTC in the past 24 hours. However, this could also create a buying opportunity for long-term holders if the price reaches the predicted support zone. Cross-market analysis shows a parallel movement in stock indices like the S&P 500, which dropped 1.8% to 5,320 points as of 3:00 PM UTC on May 31, 2025, per Yahoo Finance data, reflecting a broader risk-off sentiment. This correlation suggests that institutional money flow might be shifting away from both equities and crypto, with Bitcoin's correlation coefficient with the S&P 500 standing at 0.62 over the past 30 days. Traders could capitalize on this by monitoring stock market recovery signals as a precursor to Bitcoin’s reversal.

Technical indicators further support the possibility of a short-term correction for Bitcoin. As of 8:00 AM UTC on June 1, 2025, the Relative Strength Index (RSI) for BTC/USDT on Binance stood at 58, down from an overbought level of 72 just two days prior, indicating a cooling momentum. The Moving Average Convergence Divergence (MACD) also showed a bearish crossover on the 4-hour chart at 6:00 AM UTC on June 1, 2025, per TradingView data. Volume analysis reveals a declining trend in spot trading, with a 10% drop to $22.5 billion in the last 12 hours as of 11:00 AM UTC on June 1, 2025, compared to futures volumes holding steady at $15.7 billion, suggesting retail selling while institutional interest persists. The stock-crypto correlation remains evident as crypto-related stocks like MicroStrategy (MSTR) saw a 2.5% decline to $1,580 per share by 4:00 PM UTC on May 31, 2025, per NASDAQ data, mirroring Bitcoin’s correction. Institutional inflows into Bitcoin ETFs, however, remained positive with $120 million net inflows on May 30, 2025, according to Bloomberg ETF data, hinting at sustained long-term confidence. Traders should watch the $100,000 level as a psychological and technical support, with a potential breakout above $112,300 if stock market sentiment improves.

In summary, the interplay between M2 money supply trends and Bitcoin's price action offers a unique lens for understanding current market dynamics. The stock market's risk-off behavior continues to influence crypto assets, with Bitcoin showing a high correlation to indices like the S&P 500. Institutional money flows into Bitcoin ETFs suggest a divergence between short-term corrections and long-term optimism. For traders, the key is to monitor macroeconomic data releases, stock market movements, and on-chain metrics to time entries and exits effectively around the predicted $98,000-$100,000 support zone as of early June 2025.