A sequence of macro warnings from the Goldman Sachs camp puts Bitcoin (BTC) at risk of falling to $12,000.
Bitcoin in “low phase?”
A team of Goldman Sachs economists led by Jan Hatzius has raised its forecast for the speed of the Federal Reserve’s benchmark rate hikes. They noted that the US central bank would raise rates by 0.75% in September and 0.5% in November, up from their previous forecasts of 0.5% and 0.25%, respectively.
The path of Fed rate hikes has played a key role in determining Bitcoin price trends in 2022. The period of higher lending rates – from near zero to the 2.25-2.5 range % now – prompted investors to turn away from riskier assets and take refuge in safer alternatives like cash.
Bitcoin has fallen nearly 60% since the start of the year and is now hovering around its psychological support of $20,000. Some analysts, including pseudonymous trader Doctor Profit, believe that the price of BTC has entered the lower phase from current levels. However, the trader
#Bitcoin enters the ‚Bottom‘ phase, expecting targets between $18.000 and $25.000 till March 2023. The bottom is being formed. I will keep accumulating at these prices— Doctor Profit 🇨🇭 (@DrProfitCrypto) September 18, 2022
This is based on TA only. Please consider FEDs next decisions. 0.75 already priced in, 1bps and we see blood. pic.twitter.com/LRAgoBl6va
“Please consider the Fed’s next decisions. 0.75% [rate hike] already accounted for, 1% and we see blood.”
On the other hand, Bitcoin’s still positive correlation with the US stock market, especially the tech-heavy Nasdaq Composite, poses greater correction risks.
Sharon Bell, strategist at Goldman Sachs, suggests recent stock market rebounds could be bull traps, echoing her firm’s warning that stocks could crash 26% if the Fed gets more aggressive with its rate increases to fight inflation.
Interestingly, the warnings coincide with a recent increase in short Bitcoin positions held by institutional investors, according to CME data highlighted in the Commodity Futures Trading Commission (CFTC) weekly report.
“Certainly a sign that some people are counting on a crash in risky assets this fall,” noted Nick, an analyst at Data Resource Ecoinometrics.
Options consensus sees BTC at $12,000
Bitcoin options expiring at the end of 2022 show most traders betting on the price of BTC falling to the $10,000-12,000 area.
Overall, the call-put open interest ratio was 1.90 on September 18, with call options for the $45,000 strike price having the maximum weight. But strike prices between $10,000 and $23,000 showed at least four put options for three calls – perhaps a more realistic interim assessment of market sentiment.
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From a technical standpoint, the price of Bitcoin could drop around 30% to $13,500 as the price forms a compelling reverse pattern.
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, positioning BTC for a rally towards $25,000 as next psychological target on the rise.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
. Outlook Macro Bearish Goldman Sachs Put Bitcoin Danger Collapse