Goldman Sachs bearish macro outlook places Bitcoin at risk of plummeting to $12K

A series of macro warnings from Goldman Sachs puts Bitcoin ( BTC ) at risk of collapsing to $12,000.

Bitcoin in the “bottom phase”

Jan Hatzius led by a team of Goldman Sachs economists, raised their prediction regarding the pace of Federal Reserve benchmark rates increases. They predicted that the United States central banks would raise rates by 0.5% in November and 0.75 in September, which is higher than their previous forecasts of 0.5% or 0.25%.

The Fed’s rate-hike path played an important role in Bitcoin’s price trends for 2022. Investors have sought shelter in safer assets like cash during a period of higher lending rates, which ranged from close to zero to the 2.25-2.5% level now.

Bitcoin’s price has fallen by nearly 60% in the past year and it is currently struggling to find its $20,000. psychological support. According to some analysts, such as Doctor Profit, the price of Bitcoin has reached its lowest point at current levels. However, warned.

“Please consider FEDs’ next decisions. We see blood, and 0.75% [rate increase] is already priced in.

Comparison of BTC/USD prices between 2012-2016 & 2020-2022 Source: Doctor Profit/TradingView

However, Bitcoin’s consistent positive correlation to the U.S stock market (particularly the tech-heavy Nasdaq composite), presents deeper correction risks.

Sharon Bell, a strategist at Goldman Sachs suggests the recent rallies could be bull traps. This echos her firm’s warning that equities could collapse by 26% if it increases its rates to combat inflation.

According to CME data in the Commodity Futures trading Commission’s (CFTC), the warnings coincide with a recent increase in Bitcoin short positions by institutional investors.

CME Bitcoin derivatives held by smart money. Source: CFTC/Ecoinometrics

Nick, an analyst with data resource Ecoinometrics, stated that this is a clear sign that people are counting on a meltdown in risk assets this fall.

BTC prices at $12K for options consensus

Most traders are betting that Bitcoin prices will drop to the $10-000-12,000 area by the end 2022, according to Bitcoin options.

BTC options open interest by strike price. Source: Coinglass

The call-put open interest ratio stood at 1.90 on September 18, with the maximum weight being given to call options for strike prices above $45,000. Strike prices between $10,000 to $23,000 had at least four calls for every three — perhaps this is a more realistic interim assessment of market sentiment.

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Technically, Bitcoin’s value could fall by around 30% to $13,500 because the price forms an convincing up-and-handle pattern.

BTC/USD daily price chart with inverse cup-and-handle breakdown setup. Source: TradingView

A decisive rally above 50-day exponential moving mean (50-day EMA, the red wave) at $21,250 could negate this bearish setup and position BTC for a rally towards $25,000 as its next psychological upside target.

These views and opinions are the author’s and do not necessarily reflect those of You should do your research before making any investment or trading decision.

Opinion writer on 7trade7