In an exclusive interview with Cointelegraph, macro investor Raul Pal analyzes the macro factors keeping crypto markets under pressure and the triggers that could fuel Bitcoin’s next rally.
Macro investor Raul Pal is convinced that the current cryptocurrency bear market will only end when the Fed eases its monetary tightening by halting rate hikes. Pal predicts that this could happen in the next few months.
“It is unlikely that the Fed will raise rates as much or as quickly as people expect. My guess is that they will probably stop raising rates this summer, and that’s it,” he said in an exclusive interview with Cointelegraph.
Pal sees the combination of high interest rates and fears of a looming recession as the key macro factors driving the current cryptocurrency bear market.
“Retail investors’ income did not rise as much as prices, so they lost their discretionary income. So people can just spend less dollars and invest less,” he said.
Pal believes that the bottom of the market has not yet arrived and that a phase of mass liquidation, including cryptocurrencies and obsolete assets, may soon begin.
“[Cryptocurrency] could end up facing a surge in liquidation if we see it in equities and that will end up being the ultimate capitulation of the market,” he said.
At this point, according to Pal, the Fed will loosen monetary policy, injecting some liquidity into financial markets and thus triggering the next crypto rally.
“We are going to see a rally in bonds, a rally in cryptocurrencies, and maybe some rally in tech stocks,” Pal said.
Aside from the macro picture, other factors that could fuel the next bull run include the approval of a spot Bitcoin ETF and Ethereum’s move to proof-of-stake, which is expected in the third quarter.
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