Goldman Sachs points out the risk of Bitcoin (BTC) crashing to $12,000.
Is Bitcoin in a “bottom phase”?
A team of Goldman Sachs economists led by Jan Hatzius have upgraded their forecasts for the pace of rate hikes by the Federal Reserve. They said the Fed would raise interest rates by 0.75% in September and 0.5% in November, up from previous forecasts of 0.5% and 0.25%, respectively.
The Fed’s rate hike path is a key factor in determining Bitcoin’s price performance in 2022. The period of rising lending rates (from near zero to the current 2.25-2.5% range) encouraged investors to flee risky assets and seek safer alternatives such as cash.
Bitcoin is down nearly 60% year-to-date and is currently teetering near the psychological support of $20,000. Some analysts, such as pseudonymous trader Dr. Profit, believe that the price of BTC has entered a bottom phase at current levels. On the one hand, this trader is sounding a warning.
“Let’s look at the Fed’s next decision. 0.75% (rate hike) is already priced in, 1% will see blood.”
Bitcoin, on the other hand, has been consistently positively correlated with the U.S. stock market, especially the tech-strong Nasdaq Composite Index, making the correction risk deeper.
Goldman Sachs strategist Sharon Bell has suggested the recent rally in the stock market could be a bull trap, and if the Fed were to hike rates more aggressively to fight inflation, stocks could fall. is at risk of a 26% plunge.
Interestingly, this warning is in line with the recent increase in short Bitcoin positions held by institutional investors, according to CME data featured in the Commodity Futures Trading Commission (CFTC) weekly report. there is
“It’s definitely a sign that some people are expecting a risk asset meltdown this fall,” said Nick, an analyst at Data Resources’ ecoinometrics.
Options Expect BTC at $12,000
With Bitcoin options expiring at the end of 2022, most traders are betting that the BTC price will drop sharply to the $10-000-12000 area.
Overall, the call/put open interest ratio on Sept. 18 was 1.90, with call options with a strike price of $45,000 taking the largest weight. But at strike prices between $10,000 and $23,000, there are at least four puts to three calls, which is perhaps a more realistic mid-term assessment of market sentiment.
From a technical standpoint, Bitcoin price is forming an inverse up-and-handle pattern, which could lead to a drop of around 30% to $13,500.
Conversely, a decisive rally above the 50-day exponential moving average (50-day EMA, red wave) near $21,250 will invalidate this bearish setup and push BTC to $25,000 as the next psychological rally target. rise towards