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This article is also available in Spanish.
Jamie Coutts, the head of Real Vision Crypto Analyts, sounded warnings for Bitcoin in the coming months. Citing your up-to-date risk model of Bitcoin derivatives (DRS), Coutts claims that the price of the leading cryptocurrency is in the face of one of two edged results: a grave slowdown or a sudden growth to up-to-date highlights of all time (ATH).
Q2 Bitcoin perspectives
IN comment Shared via X Today, Coutts emphasizes its “first pass” in the DRS model, noting that the latest example on the market “Cat 5 Euphoria” in the first quarter of 2024 only about 30%occurred. This contrasts with a comparable episode in 2019, which recorded a 50% decrease – according to 70% if Covid’s shock was taken into account.
“Looking back at Euphoria Cat 5 2024 -which I marked then (in February 2024) -I surprised that the withdrawal was only -30%. The only similar movement outside the upper part was in 2019, with a decrease in 50%(70%, if you take into account the shock from Covid)” -he explains.
Coutts emphasizes that 2019 is a better barometer for current market conditions than 2021. The justification, as he notes, is that the 2019 rally preceded a grave global expansion of liquidity. By 2021, Bitcoin has already appreciated 12 times its lowest, while fluidity around the world has increased by 30%, reflecting a completely different macro environment.
The assessment of the current level of risk on the market, Coutts indicates that the DRS Bitcoin DRS record has slipped into “low risk quantile”, a zone that, according to him, offers minimal predictive power for future prices. “So where are we now? DRS Bitcoin is in low risk quantile-where the predictive power is low. If Bitcoin has reached the peak, we should expect that brutal bleeding lower,” warns before he added that the possibility of reflection remains high.
Global fluidity increases
Then Coutts emphasizes the potential of global liquidity to call another Bitcoin rally. He believes that the upcoming point of inflection of global liquidity – based on the need to stimulate heavily indebted economies – probably drives the market of derivative instruments, which calculates as four times larger than the spot market.
“However, this is not my perspectives. Global liquidity is ready for implementation, which will rearrange the derivative instrument market (4x place), potentially rejecting Bitcoin to new ATHS until May (or end of Q2 for additional lining).”
Another key insight from Coutts focuses on the global fluidity indicator, which he thinks was against unprecedented. “This means the longest contraction of the global liquidity indicator in the history of Bitcoin – three years and counting (measured from the top). Earlier tightening sections (2014-2016 and 2018-2019) lasted <2 years. How long will it last?"
He claims that the re-liquidity injection is inevitable, indicating that governments-especially those with debt indicators to GDP exceeding 100%-it would be challenging to refinance if the nominal GDP remains behind the growing cost of interest. “The FIAT system, fractional, based on debts, will implode without liquidity injection. Growing must flow.”
During the BTC press it traded at USD 87,703.
A distinguished painting created from Dall.e, chart from tradingview.com
