On August 14, Bitcoin (BTC) surged above $25,000 for the first time in months, but traders were reluctant to bet on a bull run. The pair could crash over the weekend and end up with $23,700. Over the weekend, the bulls need to hold the pair above $24,000.
Raoul Pal, an expert in macroeconomics, says he is extremely confident that crypto markets have bottomed out. The former Goldman Sachs executive claims in a new interview with asset management firm Arca that the macroeconomic climate that has kept the crypto market gloomy for most of the year is starting to change.
The macro runs for him. By that, he means that a recession is coming. The Institute for Supply Management (ISM) survey and other elements should start to disintegrate very soon and we’re noticing it everywhere.
Therefore, it is the disappearance of growth. Also, the narrative didn’t follow and most products were down 30-50%.
Everyone is betting on oil rising to $200. I believe a washout is imminent, and it drops to $60. So the final story of inflation is this.
Will inflation go down?
Pal predicts that changes in the macroeconomic environment will affect businesses first, then the labor market.
After Covid, he claimed, people accumulated huge inventories. Due to the slowing economy and the impact of inflation on disposable income, these stocks are currently unsold.
Thus, Walmart and Amazon have demonstrated this to us. In an effort to sell it, they will start offering inventory discounts. People are laying off workers. Thus, the macrocycle will reach its unpleasant stage.
Pal points out that while there is negative news for the economy, there is positive news for the financial markets.
“Why does this make Raoul optimistic? Because the result is inflation falling and bond yields falling, liquidity conditions improve. And what drives financial markets the most at the macro level are liquidity conditions. »