Real Vision CEO Raoul Pal thinks Ethereum (ETH) could be in for a price rally before another correction to align it back with macro conditions.
The former Goldman Sachs executive says the “general feeling” is that the macro conditions are so poor ETH will drop back down to a new low or retest its recent low.
However, Pal believes that Ethereum will likely move against the sentiment of the crowd.
“But my hunch is that the path of MAX PAIN is higher. Hedge funds are scrambling to buy calls just in case ETH breaks $1,800 to $2,000. They cannot afford not to participate.
Above this level, retail will start to be forced in, along with institutions. $2,200 to $2,300 is the key one for me… a break of that either happens pre-merge or post-merge. Once everyone has got back in, the market can correct sharply before rising again based on the macro.”
ETH is trading at $1,645 at time of writing. The second-ranked crypto asset by market cap is down almost 2.5% in the past 24 hours.
The “Merge” refers to Ethereum’s transition to its new proof-of-stake system. Ethereum developers say The Merge is currently planned for September 19th.
Pal also notes that crypto is driven by M2 money supply. M2 money supply roughly refers to the total amount of currency in circulation, plus near money, or highly liquid non-cash assets that can be easily converted to cash.
Pal says M2 is “about to turn” and crypto is “sniffing out the turn.”
Pal also highlights that Ethereum has been recently outperforming Bitcoin (BTC).
“ETH is also breaking out versus BTC.”
The macro guru says that Ethereum’s bullish momentum against Bitcoin (ETH/BTC) is likely being buoyed by strong fundamental growth.
“This is being driven by the superior current network effects and network activity.”
Pal concludes by reiterating that investors and traders who are sitting on the sidelines will likely be driven to participate once Ethereum gets going.
“My hunch is that the market is caught underweight (as it is in equities too) and the path of pain is higher. But, that is just shorter-term thoughts.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Admin9966
Credit: Source link
