Ex-Goldman Sachs ex-executive says Bitcoin and Ethereum are historic signal as central banks prepare to reverse policy
Macro guru Raoul Pal says Bitcoin (BTC) and Ethereum (ETH) are showing historical signals as both crypto assets rest at critical support levels.
The former Goldman Sachs executive tells his 991,000 Twitter followers that bitcoin is now at its most oversold level, suggesting extremely high-quality opportunities for longer-term investors.
“This probable cyclical bottom in BTC is the most oversold in history compared to the long-term logarithmic trend (the Metcalfe Law adoption curve) at 2 standard deviations…”
Source: Raoul Pal/Twitter
Metcalfe’s Law states that the value of a network is directly related to the number of users it has. Pal says that Ethereum’s Metcalfe law adoption rate is also at a crucial support level.
“And ETH is in its long-term log uptrend (the Metcalfe 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 downturn in digital asset markets has coincided with a sharp drop in global liquidity, but that the trend will soon reverse as central banks are cornered.
“And this cyclical low, which has pushed prices to the bottom of the long-term adoption curve, is being driven, as always, by global liquidity… And global liquidity is on the cusp of a major turn as a 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 exact, but contextualization is very important.
Crypto cycles are all about adding positions in the long-term uptrend when everyone is at maximum fear and disgust followed by boredom.
The boredom phase is usually the digestion after all the worst shocking news has come out and the markets and participants are trying to repair and take stock. Leverage is completely wiped out and we can start with a fresh slate…”
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