Raoul Pal, the CEO of Real Vision and a former Goldman Sachs executive, believes that the surge in global liquidity is poised to positively influence the value of Bitcoin and other cryptocurrencies. He highlights a historical correlation between the global money supply (M2) and Bitcoin’s performance, suggesting significant market shifts could be on the horizon.
What’s Happening in the Market?
Pal emphasizes that the period of tightening liquidity, characterized by high dollar values and interest rates expected in Q4 2024, is nearing its conclusion. The resurgence in the global money supply indicates that the current market correction is merely a typical fluctuation.
“This too shall pass. Crypto is still feeling the tightening caused by a stronger dollar and higher interest rates in Q4 2024. This is almost completed, financial conditions are rapidly easing, and M2 is returning to new peaks. This is just a normal correction.” – Raoul Pal
Referencing the market trends of 2017, Pal notes that earlier corrections led to significant rallies and eventual market recovery, driven by similar economic conditions.
How is Bitcoin Positioned for the Future?
From a technical standpoint, Pal observes that Bitcoin is currently trading within a logarithmic regression channel. This framework may help in predicting future price movements, with expectations for continued upward momentum.
“Over time, we continue to climb the log regression channel. We will see whether we remain in the main channel (red) or climb one or two standard deviations higher as the cycle develops.” – Raoul Pal
Currently, Bitcoin’s price hovers around $80,700, reflecting a positive short-term trend. Market participants will keep a keen eye on evolving conditions, particularly concerning increasing global liquidity and technical indicators that may prompt new momentum.
– Pal predicts a favorable environment for Bitcoin due to rising global liquidity.
– Historical parallels suggest potential market recoveries following similar corrections.
– Technical analysis indicates Bitcoin remains in a position for upward growth within its logarithmic regression channel.
The ongoing adjustments in financial conditions could set the stage for Bitcoin to gain traction, as interest rates stabilize and the dollar’s strength diminishes.
