Former Goldman Sachs executive says Bitcoin and Crypto Bottom already in, predicts big shift in macro backdrop
Former Goldman Sachs CEO Raoul Pal believes the bottom is in for Bitcoin (BTC), Ethereum (ETH) and the general crypto markets.
The Real Vision CEO says in a new YouTube video that traders and investors should look 12 to 18 months ahead as asset markets tend to price the future.
“Right now we can hear people all over Twitter saying, ‘We’re going into a recession. Obviously there’s going to be another leg down in stocks because they have to price in the recession. That’s assuming everything works in real time. But it doesn’t.
So when I look at the year-over-year rates of change for let’s say the NASDAQ and compare it to the ISM index, which is my guide to the business cycle… It suggests that the NASDAQ is pricing the ISM at around 40. The ISM of 40 is in a relatively deep recession. ISM of 47 is usually a recession level. And 40 is something in the order of negative 2% GDP growth. So it’s already priced in.”
The ISM Manufacturing Index is seen as an indicator of the health of the US economy. It currently stands at 52.8 as of September 1, according to Investing.com.
Pal also believes inflation is likely to turn negative over the next 18 months, which he says is good news for risk assets like crypto.
“If we look out over 12 months, the recession is behind us, interest rates are lower and inflation is low. So it’s a very good result for risk assets and crypto. Crypto bottomed in June. We had the retest. Bitcoin had a retest for just two days ago and I think it was the retest.
My DeMark indicators, which I use mainly for my technical analysis, gave me that signal. ETH had a much stronger signal in June.
I think the markets are forward-looking. I think the sentiment is extremely bearish and we are entering a potential change in the macro.”
Traders use the DeMark indicator to detect possible reversals in trends.
Bitcoin is trading at $22,191 at the time of writing. Ethereum is trading at $1,692.
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