Macro Expert Raoul Pal Foresees Impending Stock Market Bottom, Reevaluates Bitcoin and Ethereum Projections
Former Goldman Sachs executive Raoul Pal is foreseeing an imminent market bottom formation following three consecutive weeks of corrective movements. In his latest blog post, the seasoned macro expert predicts that the S&P 500 (SPX) could potentially enter an oversold state as early as this week.
Pal anticipates a scenario where institutional buyers seize the opportunity to purchase during the dip, effectively establishing a solid market bottom. He highlights the pace of the ongoing sell-off, projecting a return to oversold conditions for the S&P 500 either this week or the next.
He underscores the fact that while retail investors have maintained a long position this year, major players such as big banks have not, implying that the correction could prompt them to cover their short positions and transition to long ones. Pal envisions this activity as a stabilizing factor, potentially limiting the extent of the equity decline. He expresses confidence that this stabilization could be realized within the next week or two, coinciding with the improved market trends typically seen in September.
Shifting to Bitcoin (BTC), Pal provides insights after the cryptocurrency, along with equities, experienced a significant drop in the previous week. He points out indicators like the DeMark sequential indicator and the relative strength index (RSI) as suggesting an upcoming bullish reversal for Bitcoin.
Pal highlights that Bitcoin has recently revisited crucial support levels around $25,200. The triggering of a new DeMark daily 9 setup holds significance for him, historically indicating a reversal in price direction. Moreover, with the RSI currently standing at a mere 20, the lowest since June of the previous year, Bitcoin’s oversold status is notable.
The RSI, a commonly-used momentum indicator, aims to assess whether an asset is in an overbought or oversold state. The DeMark sequential indicator is designed to pinpoint potential market turning points, with a value of nine serving as a signal for a possible trend reversal.
At the time of writing, Bitcoin is trading at $26,125, reflecting a 0.3% decline over the past 24 hours. Pal also observes encouraging signs on the RSI indicator for Ethereum (ETH), the smart contract platform, noting that “ETH’s RSI is presently at its most oversold since June of the previous year and, if anything, appears to have shaped a substantial bullish bull flag pattern.”
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.