Raoul Pal, macro-guru, says that Bitcoin and Ethereum are showing historic signals because both crypto assets rest at critical support levels.
The ex-executive at Goldman Sachs told 991,000 of his Twitter followers that Bitcoin has become the most overhyped it has ever been. This means that Bitcoin offers long-term investors extremely high-value opportunities.
“This likely cyclical low of BTC is most oversold in history vs long-term log trend (the Metcalfe’s Law adopt curve) at 2 standard deviations.
Metcalfe’s Law says that the value of any network is directly proportional to its number of users. Pal claims that Ethereum’s Metcalfe’s Law adoption rate is also at a critical support level.
Source: Raoul Pal/Twitter
“ETH is on its long term log uptrend (the Metcalfe’s Law adopt curve).”
Real Vision founder says that crypto prices are driven mainly by USD liquidity or the amount in circulation. According to him, the recent decline in digital asset markets coincides with a sharp fall in global liquidity. However, the trend is set to reverse once central banks are backed into a corner.
“And the cyclical low that has pushed prices down to the bottom of the long-term adoption curve was as always driven by global liquidity… And global liquidity is at the cusp of a major turn as recession approaches and central banks alter their policies.”
Pal believes that the crypto markets are in the “boredom” phase. This, he claims, usually precedes any bull run.
“Don’t expect anything to be flawless, but context is extremely important.”
The purpose of crypto cycles is to add positions at the long-term trend when everyone feels at their maximum fear, disgust and boredom.
After shocking news, boredom is often the next phase of digestion. Participants and traders try to fix and take stock of the market. We can now start over…”
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
