Raoul Pal: Crypto market bottom will appear in the next five weeks, may start buying crypto next week

Raoul Pal, CEO of Global Macro Investor, predicts that the bottom of the crypto market will come in the next five weeks and says he could start buying heavily as early as next week. He compared the current bear market to the 2014 cryptocurrency crash while suggesting that the ongoing slump could be a 10x opportunity for investors.

The bottom is approaching

Pal tweeted on Tuesday that as a macro investor, he expects global assets to recover sharply in 12 to 18 months. He believes that even though commodity prices may rise in the next year and a half, the Federal Reserve will still lower interest rates.

According to his analysis of Bitcoin’s weekly relative strength index (RSI), which is currently at 31, compared to a low of 28, he expects Bitcoin to bottom out in the next five weeks. The index is a momentum indicator that analyzes the degree to which an asset is overbought or oversold based on the magnitude of recent price changes.

Pal claimed that he might start buying cryptocurrencies next week, acknowledging that it is nearly impossible to time an exact bottom and reiterated his view that crypto is a long-term investment, not a trade.

A recession is coming

He elaborated on his previous prediction that the U.S. is about to fall into recession, reiterating that "tightening financial conditions driven by commodities, interest rates and the dollar" have pushed markets to the brink of a full-blown collapse. In the short term, he sees the U.S. economy in trouble.

In his view, the ISM - the manufacturing index that measures monthly changes in the level of production in the U.S. economy - is expected to decline because overall demand for products has fallen sharply amid rising inflation. Pal believes that in the mid-70s, the index fell sharply due to inflation, which led to a stock market crash and forced the Federal Reserve to lower interest rates. He suggests that the same script may play out again.