Bitcoin hits $78K before rebound as PMI signals economic shift

Bitcoin’s (CRYPTO:BTC) price has faced turbulence since the start of US President Donald Trump’s second term, dropping from over $109,000 on Inauguration Day to a low of $78,000 in late February before rebounding to $96,000.

The market remains volatile, with analysts suggesting that recent price swings may be linked to market manipulation.

Despite short-term fluctuations, Bitcoin’s long-term movement may align with broader economic trends, particularly the business cycle and global liquidity, according to analysts.

The Institute for Supply Management’s (ISM) Purchasing Managers Index (PMI), a key economic indicator, suggests that the US economy may be entering an expansion phase.

After 26 months of contraction, the manufacturing PMI rose above 50 in January and remained above this threshold in February.

Economists consider the manufacturing PMI a leading indicator of economic activity.

“ISM leads the economy by about a month. But it’s not just the economy — it’s every asset,” according to Real Vision founder Raoul Pal.

S&P Global Market Intelligence has identified a 74% correlation between PMI data and US corporate earnings, suggesting that risk assets, including Bitcoin, may react similarly to economic shifts.

Bitcoin’s price movements in 2021 closely followed the business cycle, which lacked the expected peak many had anticipated.

Analysts expect the current business cycle to peak in late 2025 or early 2026, potentially influencing Bitcoin’s trajectory.

Another significant factor affecting Bitcoin is the global M2 money supply, a broad measure of money circulation.

Real Vision research indicates that Bitcoin’s price typically reflects changes in global M2 within approximately 10 weeks.

“Bitcoin moves in the direction of global liquidity 83% of the time in any given 12-month period,” according to analyst Lyn Alden.

As the M2 money supply increases, Bitcoin could follow suit, suggesting that macroeconomic trends remain key to its future price action.

At the time of reporting, the Bitcoin (BTC) price was $87,092.18.