Macro Guru Raoul Pal Foresees 20% Probability Of 'Gigantic Bubble Cycle' As Bitcoin Drops Over 5%

Macro guru and former Goldman Sachs executive Raoul Pal on Wednesday suggested the possibility of a bubble cycle emerging in the cryptocurrency sector.

What Happened:  According to Pal, there’s a “60% chance” we’re in a “regular cycle” akin to previous ones.

“Here's my probability set: 60% chance it's a regular cycle, somewhat like the last cycle but maybe a bit more like the previous cycle – like 2017 that got a little bit crazy,” Pal said during an interview with crypto influencer Scott Melker, adding that “there's a 20% chance that maybe it all gets front-loaded… And the other 20% chance is that this is a gigantic bubble cycle…”

Despite investors leaning towards the prospect of a shorter cycle, Pal noted that conclusions about the duration might be premature. “Everyone was a little shocked we didn't have a final leg the last time around… so now they're all expecting it to be a smaller cycle,” he said.

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Why It Matters: Another cryptocurrency analyst Ali Martinez sees a correlation between whale transactions and Bitcoin’s BTC/USD market movement. 

Martinez said, “The recent surge in Bitcoin above $45,000 seems to be backed by significant whale activity!”

Last week, Martinez noted an uptick in Bitcoin holdings among whales, stating, “BTC whales accumulated over 30,000 BTC.” He linked this accumulation to an increase in transaction activities among these large-scale holders.

The recent surge in #Bitcoin above $45,000 seems to be backed by significant whale activity!

In the past week, #BTC whales accumulated over 30,000 $BTC, coinciding with a spike in their transaction count. This accumulation could be a key factor driving the current upswing! pic.twitter.com/k54ju4Nq24

— Ali (@ali_charts) January 3, 2024

Bitcoin fell from $45,000 down to $40,000 within a brief span on Wednesday. 

Market analysts speculated on an array of potential catalysts for the plunge, including a report by Markus Thielen of Matrixport. The report posited that the SEC might reject spot Bitcoin ETF applications, contradicting previous predictions of approval and a subsequent rise to $50,000.

Price Action: At the time of writing, BTC was trading at $43,161, down 5% on Thursday, according to Benzinga Pro.

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