In a Twitter post addressing his followers, Raoul Pal, an ex-senior official at Goldman Sachs and founder of Real Vision, disclosed that the two largest crypto assets, BTC and ETH, display historical signals. According to him, both are at their critical support levels.
The former executive at the investment banking giant revealed that, at the moment, Bitcoin is at its most oversold in history, indicating possible high-value opportunities for long-term traders.
Using Metcalfe’s law to explain the event, Raoul Pai noted that BTC is at its lowest in history, but the oversold and long-term trend indicates a future value.
According to Metcalfe’s Law, an asset’s value is directly related to its number of holders. Accordingly, Pal stated that ETH’s Metcalfe Law rate is currently at a critical support level.
Furthermore, the Real Vision CEO added that the liquidity of the US dollar or the amount of USD in circulation often influences cryptocurrency prices.
He believes the recent slump in the digital asset industry also matches the drastic drop in global liquidity rates. However, the trend will likely be reversed as central banks consider a policy change.
“The cyclical low has always pushed the prices of crypto assets to the bottom of the long-term adoption slope, which is often driven by the direction of global liquidity.”
Pal added, “with global liquidity on the verge of a significant shift, the recession is beginning to play a part, and central banks are considering changing their policies.”
According to Pal, the crypto market is about to enter the “boredom” phase. He believes this stage will precede the next bull run for the industry.
He noted that the market should not expect his forecast to be correct, but the context of his analysis is essential for further evaluation.
Pal sees the boredom phase as the digestion stage when all the worst has already happened, and the markets and players are trying to fix the underlying issue and restart on a clean slate.
Will Crypto Be The End Of Central Banks?
Following the uproars that signaled the start of the 2008 global financial meltdown, central banks are seen as the leading players in the emergence of the crisis. But one of the reactions to the financial crisis was the arrival of Bitcoin.
With a decentralized system and peer-to-peer (P2P) technology, the largest crypto asset is seen by many as having the potential to stop the influence of central banks on the traditional banking system.
However, Bitcoin also has its drawbacks, making it challenging to make a case for it considering its decentralized nature. Nevertheless, the role of central banks in an economy cannot be disputed.
Still, the world awaits how the proposed adoption of a decentralized crypto asset like BTC would replace fiat.
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