Bitcoin Fever (BTC), which has captivated investors and speculators, could be on the verge of a monumental collapse.
Henrik Zeberg, chief economist at market analytics firm SwissBlock, warns that Digital currency is not a solid shelter that many believehowever, high-risk assets whose correlation with the stock market, in particular Nasdaq, can be dragged into a catastrophic fall.
Zeberg points out that financial markets are expanding to levels where they are not visible. The relationship between asset market capitalization and GDP reached 226%, exceeding 136% of the Puntocom bubble in 2000 and 107% in 2007.
In 1929, it fell 86% as the market collapsed after the stock market cracked. Even if you don’t count cryptocurrencies, the current bubble suspect is 215%.
The following graph shows how Nasdaq shot 21-22 times since 2009, but there is a “negative divergence” in the RSI, indicating the loss of impulse. This means that prices continue to rise, but the underlying impulses of the market are declining.
“We’re in the biggest bubble in history,” says Zeberg. He predicts the possibility of an increase in Nasdaq at 27,000-28,000 points before the collapse. If this happens, expect a 75-80% drop in indexes that are comparable or worse than that of Puntocom.
“Fatal” correlation with the Nasdaq
As can be seen in the graph, according to analysts, Bitcoin, according to analysts, according to analysts.
Zeberg emphasizes a strong correlation of 60-100 on the scale of assets rising and falling together. In 2020, the Nasdaq fell 28% during the Covid-19 crisis, while Bitcoin collapsed by 63%.
Between 2021 and 2022, Nasdaq lost 38% and 77% Bitcoin. If Nasdaq drops 75-80% in the next collapse, Zeberg estimates that Bitcoin could collapse 90-95%amplifies the losses due to its high volatility.
Therefore, we exclude Bitcoin as a value reserve. “It’s a risky asset that overcomes the Nasdaq after the possibility of a ‘blow-off top’,” he explains. The term describes the extreme speculative peaks before collapse. This is a phenomenon that Zeberg can be considered after the new historic biggest in Bitcoin.
Fluidity: Lifeguard or Mirage?
The increase in Bitcoin is partly due to an increase in M2 liquidity, a financial mass that includes cash and bank deposits.
but, Zeberg warns that liquidity is not always protected. During the Puntocom bubble, Nasdaq fell 85% despite an increase in M2, causing the S&P 500 to collapse.
This graph shows the Nasdaq adjusted in M2. In other words, it tries to represent the actual value of Nasdaq, taking into account the fluidity of the system. On the left, a peak of the Puntocom technical bubble around 2000 is observed.
The graph shows the trajectory of NASDAQ discounting liquidity M2. Despite the fact that the nominal Nasdaq is rising significantly, when adjusted by fluidity, we can see that the index is either above or reaching the point of Puntocom’s bubble. This suggests that if the 2000 peak is a “mass bubble,” what we are looking at now, adjusted by M2, is equally worrying.
The same thing happened in the 2008 financial crisis. “If the real economy hits a wall, the market crashes,” he declares. Predicting a recession that drugs bitcoin.
Zeberg argues that collapse is inevitable, with a technical pattern of bullish divergence and new maximums on the horizon. “It’s not based on beliefs, it’s based on historical correlations,” he concludes. Predict scenarios where Bitcoin could lose almost all value after this bubble peak.
Upward vision with warning
SwissBlock analyst and collaborator Willy Woo offers a complementary perspective, but is cautious. He claims that Bitcoin is in the final stages of his upward market.preparing to reach a new historic maximum.
As reported by Cryptonotics, Woo says he is “still traveling” for new mountain climbs, and expects new maximums in the short term. Wu points out that Bitcoin’s risk model is high but below its peak, indicating that the currency created by Nakamoto Atoshi has passed the final stretch of the bullish cycle.
but, Also, foresees a major fall after these maximums match Zeberg. Analysts say, “As the global macroeconomic market changes, we expect a bear market for BTC,” as many investors view Bitcoin as a “risk” asset, preferring a stable macroeconomic environment and seeking shelter in equipment such as financial debt during turbulence.
US debt. The possibility of bitcoin
Not everyone shares Zeberg’s pessimism. The rise in US debt has bolstered Bitcoin’s upward case as it increased $1 billion every five months due to budget deficits and mass spending during the pandemic.
Michael Saylor, CEO of MicroStrategy, describes it as “perfect, programmable and non-corrupted capital.” For him, Understanding its value leads to a 10-year vision, not a short-term one.. “The reward for the time you understand that Bitcoin is truly valuable,” he says.
Saylor adds that Bitcoin will not only surpass the S&P 500, but will grow faster than gold and place it as “the best asset of this era.” On his side, Strike CEO Jack Mullers has his trust in Fear Money. “The party hasn’t started,” he says. It suggests that a real Bitcoin rallies are coming.
Analysts like Poina and Anthony Pompliano highlight Progressive Bitcoin is dedicated to traditional marketsits offer is limited to 21 million units, and is supported by its ability to provide resistance to censorship, privacy. These characteristics are appealing to the crisis in which the government can make profits with gold, uncertainty and devaluation of Fiat currency.
