Crypto analyst Nicholas Merten is warning that Bitcoin (BTC) could collapse if the economy is thrown into a recession.
Merten tells his 512,000 YouTube subscribers that Bitcoin could decline by more than 46% from its current value if the Federal Reserve’s hawkishness leads to a prolonged economic downturn.
According to Merten, if commodities like oil, natural gas and uranium start to “cool down,” it will signal that a short-term recession is coming.
“[A short-term recession] is going to cause a little pain. Equities will probably go back down towards their lows, that 33% correction that we saw back in October 2022. Bitcoin could likely come back down toward a similar low range that it saw before around $15,000 to $17,000. And that would actually be a pretty good scenario. We may be getting a double bottom across most assets.”
He predicts that Bitcoin will not see a sustained bull market until after the Federal Reserve begins increasing liquidity in the markets to prop up the economy.
“There’s no significant [Bitcoin] trend. This definitely doesn’t look like a bull market to me when, for example, from March of 2023 to October of 2023 we are sitting sideways. We’ve broken through the ascending channel. We can’t clear through clear resistance here between $28,000 to $32,000. I think it’s time for us to maintain a conservative approach here to where we expect crypto is going.
I think we need to be patient here and wait for real signs of optimism here and more specifically signs that liquidity is going to be on our side as crypto is incredibly hungry for liquidity. It’s the lifeblood of risk-on assets like Bitcoin…
At the end of the day, Bitcoin does best when there are increases in the money supply and there is essentially an increase in risk-on mentality and none of those are happening right now.”
Bitcoin is trading for $27,912 at time of writing, up 1.8% in the last 24 hours.
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