Negative macro outlook likely to send bitcoin crashing to $12,000!

Negative macro outlook likely to send bitcoin crashing to $12,000!

A series of macroeconomic warnings from the Goldman Sachs camp announces that bitcoin (BTC) is at risk of crashing to $12,000.

Bitcoin in “floor phase”?

Goldman Sachs’ team of economists, led by Jan Hatzius, has revised upwards its forecasts for the pace of the Federal Reserve’s benchmark rate hike. They noted that the US central bank would raise rates by 0.75% in September and 0.5% in November. Which is higher than their previous forecast of 0.5% and 0.25%, respectively.

The path of Fed rate hikes played a key role in determining Bitcoin price action in 2022. The period of loan rates rising from near zero to the current 2.25 to 2.5% has encouraged investors to move away from assets more risk and seek refuge. in safer alternatives such as cash.

Bitcoin has fallen almost 60% since the beginning of the year and its psychological support of $20,000 is now fading. Some analysts, including a trader named Doctor Profit, believe that the price of bitcoin has entered the low phase at current levels. However, the trader warning :

“Consider the Fed’s next decisions. A rate increase of 0.75% is already planned, a 1% increase is bloody. »

Comparison of BTC/USD price evolution between 2012-2016 and 2020-2022. Source: Doctor Profit/TradingView

On the other hand, the consistent positive correlation between bitcoin and the US stock market, especially the tech-heavy Nasdaq Composite, is creating deeper correction risks.

Sharon Bell, a strategist at Goldman Sachs, suggests that stock rallies may be bullish recently, reflecting her company’s warning that stocks could crash 26% if the Fed becomes more aggressive in its rate hikes to fight inflation.

Interestingly, these warnings coincide with a recent increase 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 hold smart money. Source: CFTC/Ecoinometrics

“It’s certainly a sign that some people are counting on a fall in risky assets this fall,” noted Nick, an analyst at data resource Econometrics.

The options consensus sees BTC at $12,000

Bitcoin options expiring at the end of 2022 show that most traders are betting on a drop in BTC price to the $10,000-12,000 area.

BTC options open interest at strike price. Source: Coinglass

Overall, the ratio of open interest between call and put options on September 18 was 1.90, with maximum weight in calls at the $45,000 strike price. But strike prices between $10,000 and $23,000 represented at least four puts for every three call options. Perhaps this is a more realistic interim assessment of market sentiment.

Also read: Tired of losing money? Here are two reasons individual investors always lose

From a technical point of view, the price of bitcoin could fall about 30% to $13,500 as the price forms a strong inverse cup and handling pattern.

BTC/USD daily price chart with cup breakout and inversion handle pattern. Source: Trade View

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, setting BTC up for a rally towards $25,000 as the next psychological target on the rise.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of All investment and trading involves risk. You should do your own research before making a decision.

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