Raoul Pal Foresees Stock Market Rebound Soon; Shares Updated Views on Bitcoin and Ethereum

Raoul Pal, previously with Goldman Sachs, anticipates a stock market turnaround. After observing three weeks of downward corrections, he believes the market is nearing its lowest point and will soon stabilize.

In a recent blog post, renowned macro analyst Raoul Pal offers an insightful perspective on the near-term trajectories of both the S&P 500 (SPX) and Bitcoin (BTC). Pal anticipates the S&P 500 is on the brink of entering an oversold domain, possibly within the week. This downtrend, he believes, will entice institutional investors to capitalize on the situation, purchasing during this dip and thereby establishing a stable base for the market.

Elaborating on the trend, Pal notes, "Given the current rate of market decline, the S&P 500 is poised to reach oversold conditions in the imminent week or the next. Interestingly, while retail investors have predominantly taken a bullish stance this year, institutional players, particularly major banking entities, have been notably absent from this bullish parade. However, this market correction might just be the opportunity they've been waiting for. These professionals are expected to counteract their underwater short positions by taking a bullish stand. This strategic shift is likely to set a definitive limit on the market's downward potential. With September around the corner and its typical seasonality likely to play a role, the market's bottom might be closer than we think."

Switching gears to Bitcoin, the digital currency, which experienced a significant dip in value concurrent with equities last week, also garners Pal's attention. He draws attention to specific technical indicators suggesting a potential bullish surge for Bitcoin. "Over the past week, Bitcoin approached and tested its support levels, hovering around the $25,200 mark. A notable development in this context was the triggering of the DeMark daily 9 setup today, a technical indicator known historically for its efficacy in predicting price reversals. Compellingly, with its RSI at a mere 20, Bitcoin's current status is its most oversold since the previous June, foreshadowing a probable bullish turn.

Source: Raoul Pal/The Global Macro Investor

"Bitcoin's current price stands at $26,125, marking a slight decrease of 0.3% over the past day. Investors often turn to the RSI (Relative Strength Index) to assess if assets, like Bitcoin, are poised for a price shift. Recognized as a premier momentum indicator, the RSI helps ascertain whether an asset is overbought or oversold.

Another influential tool in traders' arsenal is the DeMark sequential indicator. This unique system is adept at pinpointing market shifts, with a reading of nine often suggesting an imminent trend reversal.

On a related note, Ethereum (ETH), the leading smart contract platform, exhibits bullish indicators, especially on the RSI scale. Recent data analysis indicates that Ethereum has its most oversold RSI position since the previous June. This observation aligns with the potential emergence of a bullish bull flag pattern for Ethereum."

Source: Raoul Pal/The Global Macro Investor

The bull flag technical pattern signals that an asset is consolidating, typically before resuming an upward trend. In the cryptocurrency world, Ethereum, a popular digital coin, showcases this pattern. Currently, Ethereum's trading price is $1,674, marking a slight increase of 0.1% in the past 24 hours

Aug 22, 2023

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