After Terra’s collapse, stable coins lost their peg, and Bitcoin’s tumble below $30,000 raises fears of a prolonged bear market. As a result, many are anxious about their portfolio values, which are a fraction of what they were just a few weeks ago. Thereby, developing a strategy is critical.
Get an overview of Raoul Poul’s latest views as well as what’s happening in the crypto realm and crypto rally trigger points:
Raoul Pal Blames Fed’s 0.5% Hike as the catalyst behind the market crash
The founder and CEO of Real Vision Raoul Pal in his recent interview said that he believes the current crypto bear market will have some hope only when the Federal Reserve eases its aggressive monetary policy by suspending interest rate hikes. According to Pal’s projections, that might happen within the next couple of months.
Going far, he expects this summer to be crucial as it’s entirely possible the FED will likely stop raising rates and that could provide some relief to investors.
So what’s the real cause of the Current Crypto Bear Market? Recession or Inflation?
Pal in his deepthroat analysis clarified that the current crypto bear market is being driven by a mix of both high-interest rates and fears of an impending recession.
Pal projected his macro outlook on the current crypto bear market. Based on his analysis, the current crypto market downturn is tied to the June 2021 bear market. It is also similar to the market hysteria about the March 2020 flash crash. Global markets, including technology stocks and cryptocurrency, are particularly vulnerable. Crypto investors are complaining as the market shakes, while the tech market loses billions.
Some analysts have labeled the present stock market turmoil a “panic” attack. The takeback is that all that is required to restore normalcy is for people to return to their senses and that once they do, the recovery will be as quick as the market’s drop from its all-time high.
According to his knowledge of the industry, he has seen such situations in the past, but he also said that the reason why this stock market crash is so difficult to understand is that it is practically different from previous crashes. What is new is that it is the product of a pre-planned recession.
Do we see any relief for Retail Investors in the coming time?
Inspite of the market trend retail investors’ income has not increased at the same pace as prices, resulting in a loss of discretionary income. As an outcome, people can only spend less money and become less involved,” he explained.
So is this an indication of the massive liquidation phase?
Pal believes that the market bottom has not yet been reached and a massive sell-off in crypto and conventional assets can be expected in the near future.
He further warns the investors to stay away from the space if they can’t handle dealing with a 60% drawdown from peak to trough in your kitty. The latest trend is unpredictable and full of uncertainties.
“So the market has to deal with inflation and [slowing] growth, which basically implies that everyone hit the sell button. He predicted that a huge liquidation step would occur, involving crypto and legacy assets. This is the 1 star market correlation he warned against.
Despite acknowledging that Raoul Pal still considered crypto assets as long-term investments.
Easing the tightening policy would allow a flow of cash into the financial markets, which could trigger the next crypto bull market.
On Ground Analysis of Next crypto rally
“If we see a liquidation spike inequities, [crypto] could see one as well, and then that will be the market’s final capitulation,” he said. And relaxing the tightening policy would allow for more liquidity in the financial markets, potentially triggering the next crypto bull run.
“Bonds, cryptocurrency and even some tech companies will all rally,” Pal said.
What could trigger the next bull run?
Besides the macro picture, other factors that could facilitate the next bull run are the launch of a Bitcoin spot ETF and Ethereum’s migration to a proof-of-stake consensus mechanism which might trigger the cryptocurrency rally.
