Ex-Goldman Sachs executive says Bitcoin and Ethereum flash historic signal as central banks prepare to reverse policy
Macro guru Raoul Pal says Bitcoin (BTC) and Ethereum (ETH) are showing historic signals as both cryptoassets rest on critical support levels.
The former Goldman Sachs boss says his 991,000 Twitter followers that Bitcoin is now the most oversold it has ever been, implying ultra-high value opportunities for long-term investors.
“This likely cyclical low in BTC is the most oversold in history compared to the long-term log trend (Metcalfe’s Law adoption curve) by 2 standard deviations…”
Metcalfe’s Law states that the value of a network is directly related to the number of users it has. Pal says Ethereum’s Metcalfe’s Law adoption rate is also at a crucial support level.
“And ETH is on its long-term log uptrend (Metcalfe’s Law adoption curve).”
According to the Real Vision founder, crypto prices are largely driven by USD liquidity, or the amount of dollars in circulation. He says the recent slowdown in digital asset markets has coincided with a sharp drop in global liquidity, but that trend is about to reverse as central banks are backed into a corner.
“And this cyclical recession that has pushed prices to the bottom of the long-term adoption curve is, as always, driven by global liquidity … And global liquidity is on the cusp of a major reversal, as recession looms and central banks change their policies. .”
Pal says crypto markets are entering the “boredom” phase, which he says usually precedes the next bull run.
“Don’t expect any of this to be accurate, but the contextualization is very important.
Crypto cycles are about adding positions in the long-term uptrend when everyone is at maximum fear and loathing, followed by boredom.
The boredom phase is usually the digestion after all the worst shocking news comes out and the markets and participants try to repair and take stock. Influence is completely obliterated and we can start with a new board…”
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Featured image: Shutterstock/vvaldmann
