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 the insight on Raoul Poul’s latest opinions as well as what’s going on in the crypto realm and the trigger points of the crypto rally:
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 that this summer will be crucial as it is quite possible that the FED probably stop raising rates and that may give some relief to the 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 has projected his macro perspectives on the current crypto bear market. Based on his analysis the current crypto market downturn is linked to the bear market of June 2021. It is also similar to the market’s hysteria about the March 2020 flash crash. Global markets, including tech equities and cryptocurrency, are particularly vulnerable. Crypto investors are complaining as the market trembles, while the tech market is losing 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.
As per his industry knowledge, he has seen such situations in past however he also said that the reason why this market crash is so hard to understand is that it is practically different from previous crashes. What’s new about it is that it’s 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 it an indication of the mass liquidation phase?
Pal believes that the market’s bottom is still not in store yet and that a massive liquidation of crypto and conventional assets can be expected in the coming 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.
“Thus the market has to deal with inflation and [slowing] growth, which essentially implies that everyone has pressed the sell button. He predicted that a huge liquidation stage will occur, involving crypto and legacy assets. This is the 1-star market correlation that he warned about.”
Despite acknowledging that Raoul Pal still considered crypto assets as long-term investments.
Ease on the tightening policy would allow liquidity flow in the financial markets, and this 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 technology 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.
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