Data from Bitcoin derivatives also indicates that sentiment is shifting in favor a huge crash below $20,000, which is the current psychological support. A series of macro warnings from Goldman Sachs puts Bitcoin ( BTC ) at risk of collapsing to $12,000.
Jan Hatzius led by a team of Goldman Sachs economists, raised their prediction regarding the pace of Federal Reserve benchmark rates increases. They predicted that the U.S. central banks would raise rates by 0.5% in November and 0.75 in September, which is higher than their previous forecasts of 0.5% or 0.25%.
Bitcoin could crash to $12,000
The Fed’s rate-hike path played an important role in Bitcoin’s price trends for 2022. Investors have sought shelter in safer assets like cash during a period of higher lending rates, which ranged from close to zero to the 2.25-2.5% level now.
Bitcoin’s price has fallen by nearly 60% in the past year and it is currently struggling to find its \$20,000. psychological support. According to some analysts, such as Doctor Profit, the price of Bitcoin has reached its lowest point at the current levels. However, warned.
“Please consider FEDs’ next decisions. We see blood, and 0.75% [rate increase] is already priced in.
However, Bitcoin’s consistent positive correlation to the U.S. stock exchange, especially the tech-heavy Nasdaq composite, presents deeper correction risks.
Sharon Bell, a strategist at Goldman Sachs suggested recent rallies in stock market could be bulltraps. This echos her firm’s warning about the possibility that equities will crash by 26% if Fed increases its rates to combat inflation.
According to CME data in the Commodity Futures trading Commission’s (CFTC), the warnings coincide with a recent increase in Bitcoin short positions by institutional investors.
Nick, an analyst with data resource Ecoinometrics, stated that this is a clear sign that people are counting on a meltdown in risk assets this fall.