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Goldman Sachs’ Bearish Macro Outlook Puts Bitcoin At Risk To Crash To $12K

A succession of macro warnings emanating from the Goldman Sachs camp puts Bitcoin (BTC) at risk of crashing to $12,000.

Bitcoin in “lower stage?”

A team of Goldman Sachs economists led by Jan Hatzius raised their forecast for the rate of interest rate hikes by the Federal Reserve. They noted that the US central bank would raise interest rates by 0.75% in September and 0.5% in November, up from their earlier forecast of 0.5% and 0.25%, respectively.

The Fed’s rate-rise path has played a key role in determining Bitcoin’s price trends in 2022. The period of higher lending rates – from near zero to now 2.25-2.5% – has prompted investors to abandon riskier assets and seek shelter in safer alternatives such as cash.

Bitcoin is down nearly 60% year-to-date and is now teetering around its $20,000 psychological support. Some analysts, including a pseudonymous trader Doctor Profit, believe that the price of BTC has entered the bottom phase at the current level. However, the trader warned:

“Consider the following decisions from the FED. 0.75% [rate hike] already priced in, 1% and we see blood.”

BTC/USD price performance comparison between 2012-2016 and 2020-2022. Source: Doctor Profit/TradingView

On the other hand, Bitcoin’s consistently positive correlation with the US stock market, especially the tech-heavy Nasdaq Composite, poses deeper correction risks.

Sharon Bell, a strategist at Goldman Sachs, suggests the recent stock market rallies could be bull traps, following her company’s warning that stocks could crash by 26% if the Fed becomes more aggressive with its rate hikes to fight inflation. .

Interestingly, the warnings coincide with a recent surge in Bitcoin short positions from institutional investors, according to CME data highlighted in the weekly report from the Commodity Futures Trading Commission (CFTC).

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

“Definitely a sign that some people are counting on a collapse in risky assets this fall,” noted Nick, an analyst at data source Ecoinometrics.

Options consensus see BTC at $12K

Bitcoin options expiring at the end of 2022 shows that most traders are betting that the BTC price will drop all the way to the $10,000-12,000 range.

BTC options open interest by strike price. Source: Coinglass

Overall, the call-put open interest ratio was 1.90 on Sept. 18, with call options at the strike price of $45,000 carrying the maximum weight. But strike prices between $10,000 and $23,000 showed at least four puts for every three calls — which is perhaps a more realistic, mid-term evaluation of market sentiment.

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From a technical standpoint, Bitcoin’s price could fall by about 30% to $13,500 as the price forms a convincing inverse pattern.

BTC/USD daily price chart with inverted heads and handles format. Source: TradingView

Conversely, a decisive rally above the 50-day exponential moving average (50-day EMA; the red wave) near $21,250 could invalidate this bearish setup, leading BTC to rally to $25,000 as the next psychological upside target. could be positioned.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move carries risks, you should do your own research when making a decision.