Bitcoin futures data also indicate a change in sentiment in support of a precipitous decline below $20,000, the psychological support level at now.
Bitcoin (BTC) is in danger of falling below $12,000 because of a series of macro warnings issued by Goldman Sachs.
A group of Goldman Sachs economists headed by Jan Hatzius increased their forecast for the Federal Reserve’s benchmark rate rises. They observed that the U.S. central bank will raise rates by 0.75 percent in September and 0.50 percent in November, an increase over their earlier projections of 0.25 percent and 0.25 percent, respectively.
The Fed’s rate-hike course has had a significant effect on shaping the price trends of Bitcoin in 2022. The era of increased lending rates, from near zero to the current range of 2.25 to 2.5%, has pushed investors to shift out of riskier assets and into safer alternatives such as cash.
Bitcoin has declined by about 60 percent year-to-date and is now hanging at its psychological support of $20,000. At present levels, several pundits, like the fictitious trader Doctor Profit, think the BTC price has reached the bottom phase. However, the merchant cautioned:
“Please consider FEDs upcoming choices. 0.75 percent [rate increase] is already factored in; 1 percent and we see blood.”
On the other side, the persistently strong link between Bitcoin and the U.S. stock market, especially the tech-heavy Nasdaq Composite, creates greater correction concerns.
Sharon Bell, a strategist at Goldman Sachs, thinks recent stock market surges might be bull traps, repeating her firm’s prediction that shares could plummet by 26% if the Federal Reserve becomes more active in raising interest rates to combat inflation.
According to CME statistics noted in the Commodity Futures Trading Commission’s (CFTC) weekly report, the warnings correspond with a recent increase in Bitcoin short positions held by institutional investors.
CME Bitcoin futures are owned by intelligent capital. CFTC/Econometrics is the source for this data.
Nick, an analyst at the data site Econometrics, said, “This is undeniably a hint that some individuals are anticipating a crash in risky assets this autumn.”
Bitcoin options that expire at the end of 2022 indicate that the vast majority of traders anticipate a BTC price decrease to the $10,000-12,000 range.