Worst of sales and liquidations probably over Bitcoin (BTC), says macro guru Lyn Alden
Macro strategist Lyn Alden says that the worst part of Bitcoin’s bear market is probably over after a shocking first half of 2022 which witnessed BTC losing over 56% of its value.
In a new interview on the Hard Money podcast, Alden says that leading digital asset Bitcoin (BTC) may be on its way to recovery when mass liquidations stop.
“When Bitcoin traded around $ 30,000, there were some signs that maybe the bottom was in. Of course we had a certain capitulation. This whole thing was even a leg lower, and at least at the moment it looks like the worst of the sale – the quick sale, the liquidations are behind us. ”
However, Alden warns that it is possible for the top cryptocurrencies at market value to go one more leg down despite the fact that they are currently in a “deep value zone.”
“There are still not many bullish catalysts at the moment when it comes to the macro landscape, and so I do not want to obviously rule out further downward price movements, but I think it is based on most ways to value Bitcoin or we look at Bitcoin’s history, we are in a kind of deep value zone here …
I never think investors should rule out more downward legs as long as the macro situation is so uncertain. “
The macro guru adds that Bitcoin acts as a strong hedge against a certain type of inflation.
“There are different types of inflation. It is monetary inflation and then there is inflation that often comes with a lag behind monetary inflation, and what we have actually seen for the most part is that Bitcoin is very strongly correlated with money growth, global M2 especially measured in dollars, and so in the course of of the last couple of years, when we got the huge increase in the money supply around the world, Bitcoin did very well.
As might be expected, we began to see a reduction in money supply growth, and you began to see that the Fed and some other central banks were actually trying to push back on inflation, which was materializing. That’s when Bitcoin has and many other assets for that matter have started to struggle. So I would say that Bitcoin has been a useful hedge against monetary inflation, but it is ahead of actual inflation. “
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