Why Bitcoin Could Collapse Another 50%, Says Michael “Big Short” Burry

Former hedge money manager Michael Burry made different bearish prediction for Bitcoin and accepted equities. Renowned for his abbreviated presumption which preceded the U.S. lodging marketplace crash, and 1 of the periods successful caller economical past for the world, Burry believes much symptom for BTC’s terms is ahead.

Related Reading | Shiba Inu (SHIB) Shines Green In Pool Of Crimson – Who’s Buying?

Currently, Bitcoin is trading astatine $19,400 with an 8% nonaccomplishment successful the past 7 days. The cryptocurrency was moving sideways astir its 2017 all-time precocious levels, $20,000, but the marketplace took yet different crook to the downside and mightiness re-test its yearly lows adjacent $17,000.

BTC’s terms trends to the downside connected the 4-hour chart. Source: BTCUSD Tradingview

This could beryllium a fraction of aboriginal losses, according to Burry. The erstwhile hedge money manager has been bearish connected BTC seems the cryptocurrency was trading northbound of $60,000, successful October 2021. Via his Twitter account, Burry asked his followers tips connected however to abbreviated a cryptocurrency:

Ok, I haven’t done this before, however bash you abbreviated a cryptocurrency. Do you person to unafraid a borrow? Is determination a abbreviated rebate? Can the presumption beryllium squeezed and called in? In specified volatile situations, I thin to deliberation it’s champion not to abbreviated (…).

A abbreviated clip after, BTC’s terms reached its existent all-time precocious which could person resulted successful large profits for Burry, if helium was capable to unfastened a abbreviated position. In that case, helium mightiness inactive hold connected taking profits, according to its latest prediction, accepted equities and BTC could acquisition much downside connected the backmost of a atrocious net season:

Adjusted for inflation, 2022 archetypal fractional S&P 500 down 25-26%, and Nasdaq down 34-35%, Bitcoin down 64-65%. That was aggregate compression. Next up, net compression. So, possibly halfway there.

Some Good News For Bitcoin In The Short Term

Two experts precocious shared imaginable bullish catalyzers for Bitcoin, astatine slightest for a abbreviated play of time. Jurrien Timmer, Director of Macro for concern steadfast Fidelity, believes equities person a accidental to rebound from their caller crash.

However, Timmer believes the risk-off play could widen further portion enslaved yields inclination upwards. In the upcoming net play for U.S. publically traded companies, 1 could supply much clues connected what’s adjacent for the market, including Bitcoin which has been displaying a correlation with accepted equities.

With enslaved yields down and equities up, the correlation betwixt the 2 plus classes remains somewhat affirmative connected a 12-month basis. It’s uncommon to spot the Z-score for some stocks and bonds truthful antagonistic astatine the aforesaid time. pic.twitter.com/BhJ8BklPmo

— Jurrien Timmer (@TimmerFidelity) July 1, 2022

On the different hand, Bloomberg Intelligence Mike McGlone has been expecting a driblet successful the terms of commodities. If these assets inclination to the downside, the Fed mightiness dilatory down connected its economical tightening and supply risk-on assets similar Bitcoin with immoderate country for relief.

Commodities rallying often bespeak precocious inflation, they suggest the other erstwhile they inclination to the downside which could suggest the U.S. fiscal instauration mightiness beryllium succeeding astatine cutting down inflation, presently their evident fig 1 priority. McGlone said:

Commodities Aren’t Complicated, 1H Was High: When the past of 2022 is written, there’s a bully accidental that the 1H pump successful commodity prices volition play retired similar akin surges successful the past, with a reciprocal dump.

Timmer and different experts judge that antagonistic quality connected the economy, talks of economical recession, and a sustained marketplace clang mightiness let the Fed to go much dovish connected its monetary policy. The marketplace has reacted to the downside arsenic a effect of the Fed, but immoderate judge this volition beryllium insufficient to halt inflation.

Related Reading | Ethereum (ETH) Bends Toward $1,000 As Doubt Fills Crypto Markets

Fed Chairman Jerome Powell has expressed doubts astir a little assertive monetary policy. In an interrogation with The Wall Street Journal, Powell said bringing down ostentation volition effect successful “some pain” for planetary markets. Does this mean Burry volition beryllium close arsenic successful 2008?