Former Goldman Sachs executive Raoul Pal says that potential downside in the stock market may threaten crypto prices in the coming months.
Pal tells his 925,800 Twitter followers that he’s looking at the Nasdaq and says that from a technical analysis standpoint, the index is on the verge of potentially making lower lows if its critical support is broken.
“The failure of equities to hold has exposed risk of severe downside if the low is taken out.”
Pal doesn’t necessarily see new lows in store for crypto markets but warns that current macro conditions are hinting that a major correction is coming, which could drag down digital assets with it.
“Seeing energy stocks, oil commodities, etc. all in the red start to raise the risk of a full ‘correlation’ of one accelerated panic.
The only place to hide would be the dollar and probably bonds (because everyone is short).
And yes, crypto would get caught up too (not new lows).”
In a new interview with Real Vision, Pal says if crypto ends up in a corrective phase, he thinks it will be more noise within an overall ranging market structure.
“I’m kind of looking for this downside to layer into positions of stuff that I want to get into… Obviously, crypto will get caught up in this and will go lower but I think we’re all used to that going up and down right now. I don’t think it takes out the low, so I just think it’s more noise and we’re in this wide sloppy range we’ve been in for the last year and a bit.”
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