Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in

Crypto market investors with the most prominent names believe there is a bottom and it is time to buy. However, one warns that prices could fall below support levels which can lead to catastrophic results.

Billionaire Mike Novogratz is the founder, chairman, and CEO of Galaxy Digital Holdings, a digital asset merchant bank. He told a Morgan Stanley conference that cryptocurrencies could be nearing a bottom. Bitcoin (BTC), at $20,000 to $21,000, and Ethereum (ETH at $1,000) are likely to hold.

He said that crypto would reach its bottom faster than U.S. stocks which could drop another 15% to 20%.

Ethereum should have around $1,000, and right now it is $1,200. Bitcoin is currently around $20,000, $21,000, and it’s $23,000. So you are closer to the bottom than you are to stocks. I believe that stocks will continue to decline by 15% to 20%.

Hayes warns about the risk of a sell-off

Arthur Hayes was co-founder of BitMEX and the former chief of BitMEX. He also shared a similar opinion, acknowledging that on-chain data from Wrapped Bitcoin (wBTC), and Ether showed that “liquidations had mostly occurred.”

Hayes said that if support levels for BTC or ETH fall to $20,000 or $1,000, we might see “massive selling pressure” in the spot markets.

4/ If these levels are broken, $20k $BTC and $1k $ETH, expect huge sell pressure in spot markets, as dealers hedge their positions. It is possible that some otc brokers will not be able to properly hedge and could go bankrupt.
— Arthur Hayes (@CryptoHayes) June 14, 2022

Pal, Scaramucci loading up

Raoul Pal, a macro investor, sees the market downturn as an opportunity for him to increase his crypto positions. Pal informed his 956,000 followers on Twitter that he is in a “buy zone” for Bitcoin (BTC) and added that he was ready to “significantly increase” his crypto positions “probably beginning next week and continuing into July.”

Ex-executive at Goldman Sachs explained that the imminent Bitcoin bottom can also been signaled by the weekly Relative strength Index (RSI), at 31. It is getting closer to its lowest point at 28.

The weekly RSI is 31 and 28 respectively, which suggests that the low is not far away. However, don’t expect to hit the low. The DeMark weekly charts indicate that low will be next week or within 5 weeks.
— Raoul Pal (@RaoulGMI) June 14, 2022

Investors use RSI to determine the rate and magnitude of price movements. This can indicate overbought conditions or oversold ones. According to Investopedia a RSI reading below 30 indicates that the condition is oversold or undervalued.

Pal stated that his framework often anticipates 60% drawdowns over long-term time horizons.

“In fact, the best method to maximize returns is to increase significantly when the market tests the key trends.”

Skybridge Capital founder Anthony Scaramucci told CNBC’s Squawk Box that investors should “stay disciplined” in the face of crypto slump. He noted that his fund had continued to add Bitcoin and Ethereum to its portfolio.

“With incremental cash coming in to our fund, we have purchased more Bitcoin and Ethereum […]. So, yes, people will look back at this mess and say, I wish I had more cash to buy into it.”

Related: It is too early to say that Bitcoin has reclaimed its key bear market support — Analysis

Novogratz was more cautious about investing now. He took a conservative approach to the matter and told attendees that it might not be time to “deploy lots capital” because the economy could continue to fall.

“Until I see Fed flinch until I truly think, OK, the economy is so terrible, and the Fed will have to stop hiking, or even consider cutting, I don’t believe it is time for me to really deploy a lot of capital.”

Another indicator that may help determine whether crypto is at its market bottom could be the Fear and Greed Index, currently at 8 under “Extreme Fear”, and last seen around May 17th, during Terra (LUNA’s) collapse.

Bitcoin Fear and Greed Index has 8. Extreme Fear Current price: $21,598
— Bitcoin Fear and Greed Index (@BitcoinFear), June 14, 2022

Bitcoin currently has a price of $22,061 while ETH is currently at $1,215 as of this writing.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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