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Bitcoin Signals “COVID-Era” Risk-Reward Setup Again: Bitwise Analyst

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Bitcoin’s present value motion could also be flashing a well-recognized sign, in keeping with Bitwise Europe’s head of analysis, André Dragosch.

Key Takeaways:

  • Bitwise Europe’s analysis chief, André Dragosch, says Bitcoin now reveals a COVID-era risk-reward profile.
  • He argues BTC is already pricing in a recession-like outlook after steep sell-offs and heavy liquidations.
  • Dragosch expects world development to rebound as previous stimulus feeds by means of, doubtlessly lifting Bitcoin subsequent.

In a recent post on X, Dragosch mentioned the market is starting to resemble the intense risk-reward atmosphere seen through the early days of the COVID-19 pandemic.

“The final time I noticed such an uneven risk-reward was throughout COVID,” Dragosch wrote in a submit on X on Friday, pointing to March 2020 when Bitcoin collapsed from about $8,000 to beneath $5,000 as panic swept by means of world markets.

Bitwise Analyst: Bitcoin Now Trading Like a Global Downturn Is Underway

Dragosch argued that right this moment’s setup feels related, not due to a well being disaster, however as a result of Bitcoin is as soon as once more buying and selling as if a deep downturn is already right here.

He mentioned the cryptocurrency seems to be “pricing in” what he described as probably the most bearish world development outlook since 2022, a interval dominated by aggressive charge tightening from the US Federal Reserve and the shock failure of FTX.

“Bitcoin is basically pricing in a recessionary development atmosphere,” he mentioned, including that the market has doubtless absorbed “a whole lot of the unhealthy information” already.

Recent value motion helps the view that sentiment has weakened sharply. Bitcoin is down greater than 17% over the previous 30 days, in keeping with CoinMarketCap.

After hitting an all-time high of $125,100 on Oct. 5, the asset slid right into a sustained pullback following a $19 billion liquidation wave on Oct. 10. The drop got here days after Donald Trump introduced sweeping new tariffs on Chinese imports.

Momentum deteriorated additional in mid-November when Bitcoin slipped beneath $100,000, a degree many merchants seen as psychological assist.

Although the value briefly dipped beneath $90,000 on Nov. 20, consumers shortly stepped in, fueling hopes that the ground could also be forming.

Dragosch believes the pessimism might be misplaced. He argues that world development could quickly enhance as prior financial stimulus works its manner by means of the system, a sample much like the post-COVID growth.

“I genuinely suppose we’re watching an identical macro setup proper now,” he wrote.

Cathie Wood Calls Liquidity Rebound for Crypto

As reported, ARK Invest CEO Cathie Wood has forecasted that the liquidity squeeze hitting crypto and AI markets will reverse within weeks, pushed by three Federal Reserve coverage shifts anticipated earlier than year-end.

Her agency continues aggressively buying crypto equities through the downturn, deploying over $93 million in a single day this week throughout beaten-down digital asset shares.

Speaking throughout ARK’s November market webinar, she recognized three non permanent liquidity constraints she expects to ease quickly by means of Federal Reserve motion and reopened authorities spending.

Wood expects the Federal Reserve to finish quantitative tightening at its December 10 assembly, instantly easing one strain level.

The authorities shutdown that triggered the Treasury General Account money buildup has concluded, returning funds to circulation.

The submit Bitcoin Signals “COVID-Era” Risk-Reward Setup Again: Bitwise Analyst appeared first on Cryptonews.

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