"Gold near record highs on a liquidity basis…Bitcoin still in a pre-rally 'correction phase'"

Gold is trading near record-high levels when viewed through the lens of global liquidity (M2), while Bitcoin (BTC) remains in a correction phase ahead of a potential rally, according to an analysis.

According to CoinDesk on the 22nd (local time), gold prices adjusted for M2 (a liquidity gauge including cash and deposits) are nearing levels similar to those seen at major peaks in 1974 (about $200 per ounce) and 2011 (about $1,800). Taken together, this suggests gold is moving sideways in an overvalued zone relative to global liquidity, a stage interpreted as forming a kind of “cycle bottom.”

By contrast, Bitcoin, on the same basis, is maintaining a range-bound pattern similar to 2024 and is re-testing the vicinity of the 2021 peak. Given that past cycles repeatedly saw liquidity-adjusted prices break above prior highs, the current move may represent a typical correction phase before a further leg up.

CoinDesk said, "Bitcoin is currently sitting about 40% below last October’s peak. Compared with past cycles, that is a sign there is still upside potential."

Meanwhile, recent price action between gold and Bitcoin appears to be re-synchronizing. After gold reversed lower around the $5,000 level, the two assets have moved in a similar direction, showing a short-term positive (+) correlation, the analysis said.