Goldman Sachs’ bearish macro outlook puts Bitcoin at risk of crashing to $12K

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A sequence of macro warn­ings com­ing out of the Gold­man Sachs camp puts Bit­coin (BTC) at a risk of crash­ing to $12,000.

Bitcoin in “bottom phase?”

A team of Gold­man Sachs econ­o­mists led by Jan Hatz­ius raised their pre­dic­tion for the speed of Fed­er­al Reserve bench­mark rate hikes. They not­ed that the U.S. cen­tral bank would increase rates by 0.75% in Sep­tem­ber and 0.5% in Novem­ber, up from their pre­vi­ous fore­cast of 0.5% and 0.25%, respectively.

Fed’s rate-hike path has played a key role in deter­min­ing Bit­coin’s price trends in 2022. The peri­od of high­er lend­ing rates — from near zero to the 2.25–2.5% range now — has prompt­ed investors to rotate out of riski­er assets and seek shel­ter in safer alter­na­tives like cash.

Bit­coin has dropped by almost 60% year-to-date and is now wob­bling around its psy­cho­log­i­cal sup­port of $20,000. Some ana­lysts, includ­ing a pseu­do­ny­mous trad­er Doc­tor Prof­it, believe BTC’s price has entered the bot­tom phase at cur­rent lev­els. How­ev­er, the trad­er warned:

“Please con­sid­er FEDs next deci­sions. 0.75% [rate hike] already priced in, 1% and we see blood.”

BTC/USD price per­for­mance com­par­i­son between 2012–2016 and 2020–2022. Source: Doc­tor Profit/TradingView

On the oth­er hand, Bit­coin’s con­sis­tent­ly pos­i­tive cor­re­la­tion with the U.S. stock mar­ket, par­tic­u­lar­ly the tech-heavy Nas­daq Com­pos­ite, pos­es deep­er cor­rec­tion risks.

Sharon Bell, a strate­gist at Gold­man Sachs, sug­gests the recent ral­lies in the stock mar­ket could be bull traps, echo­ing her fir­m’s warn­ing that equi­ties could crash by 26% if the Fed gets more aggres­sive with its rate increas­es to fight inflation.

Inter­est­ing­ly, the warn­ings coin­cide with a recent rise in Bit­coin short posi­tions held by insti­tu­tion­al investors, accord­ing to CME data high­light­ed in the Com­mod­i­ty Futures Trad­ing Com­mis­sion’s (CFTC) week­ly report.

CME Bit­coin deriv­a­tives held by smart mon­ey. Source: CFTC/Ecoinometrics

“Def­i­nite­ly a sign that some peo­ple are count­ing on a risk asset melt­down this fall,” not­ed Nick, an ana­lyst at data resource Ecoinometrics.

Options consensus see BTC at $12K

Bit­coin options expir­ing at the end of 2022 show most traders bet­ting on the BTC price drop­ping all the way down to the $10–000-12,000 area.

BTC options open inter­est by strike price. Source: Coinglass

Over­all, the call-put open inter­est ratio was 1.90 on Sep. 18, with call options for the $45,000 strike price car­ry­ing the max­i­mum weight. But strike prices between $10,000 and $23,000 showed at least four puts for every three calls — which is per­haps a more real­is­tic, inter­im eval­u­a­tion of mar­ket sentiment.

Relat­ed: Tired of los­ing mon­ey? Here are 2 rea­sons why retail investors always lose

From a tech­ni­cal per­spec­tive, Bit­coin’s price could drop by rough­ly 30% to $13,500 as the price forms a con­vinc­ing inverse up-and-han­dle pattern.

BTC/USD dai­ly price chart with inverse cup-and-han­dle break­down set­up. Source: TradingView

Con­verse­ly, a deci­sive ral­ly above the 50-day expo­nen­tial mov­ing aver­age (50-day EMA; the red wave) near $21,250 could inval­i­date this bear­ish set­up, posi­tion­ing BTC for a ral­ly toward $25,000 as its next psy­cho­log­i­cal upside target.

The views and opin­ions expressed here are sole­ly those of the author and do not nec­es­sar­i­ly reflect the views of Cointelegraph.com. Every invest­ment and trad­ing move involves risk, you should con­duct your own research when mak­ing a decision. 



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