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This article is also available in Spanish.
The Cryptographic Analyst of Real Vision, Jamie Coutts, has sounded a marked warning for bitcoin in the coming months. Citing his new model of risk score of bitcoin derivatives (DRS), Coutts argues that the leader of the cryptocurrency faces one of the two acute results: a severe recession or an increase in the new maximums of all time (ATH).
bitcoin Outlook Q2
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“Looking back in the euphoria Cat 5 of Q1 2024, which marked at that time (in February 2024), I am still surprised that the setback out of single -30%. The only similar movement outside a higher cycle was in 2019, with a 50% drop (70% if you invoice in the shock Covid),” he explains.
Coutts emphasizes that 2019 is a better barometer for current market conditions than 2021. Justification, observes, is that the 2019 rally preceded a great global liquidity expansion. By 2021, bitcoin had already appreciated 12x of its minimums, while world liquidity grew 30%, which reflects a very different macro environment.
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When evaluating the current market level of the market, Coutts points out that bitcoin DRS metric has slipped into the “low risk quantile”, an area that, he says, offers a minimum predictive power for future prices. “So, where are we now? bitcoin's Drs are in the low risk quantile, where predictive power is low. If bitcoin has reached its maximum point, we should expect brutal bleeding to be lower,” he warns, before adding that the possibility of a rebound remains high.
Global liquidity increasing
Coutts then underlines the global liquidity potential to trigger another bitcoin rally. He believes that an upcoming turning point in global liquidity, driven by the need to stimulate very indebted economies, will probably feed the derivative market, which calculates that it is four times larger than the spot market.
“However, that is not my perspective. Global liquidity is ready to inflict that it will revise the derivative market (4x spot), potentially destroying bitcoin to new ATHs for May (or end of Q2 for additional filling).”
Another key vision of Coutts focuses on the global liquidity index, which according to him has been in contraction for an unprecedented section. “This marks the longest contraction of the global liquidity index in the history of bitcoin: three years and telling (measured from the peak). The previous adjustment episodes (2014–2016 and 2018-2019) lasted <2 years. How much more time will it happen?"
He argues that a renewed liquidity injection is inevitable, noting that governments, especially those with debt / GDP relations that exceed 100%, would be difficult to refinance if the nominal GDP is left behind the growing interest costs. “The Fiat, fractional-fierce system, based on debt will be implioled without liquidity injections. The spice must flow.”
At the time of publication, btc quoted at $ 87,703.
Outstanding image created with Dall.E, Record of TrainingView.com
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