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Raoul Pal, the former executive and macro expert at Goldman Sachs, predicts that the US stock index S&P 500 will soon hit bottom and turn upward after three consecutive weeks of correction. Pal also expects the crypto king Bitcoin (BTC) and the altcoin king Ethereum (ETH) to rise.
Expectation of Oversold Zone for S&P 500
In a recent blog post, macro expert Pal stated that the S&P 500 will likely enter the oversold zone sometime this week. Pal predicts that institutional buyers will step in to buy the dip, creating a bottom zone for the market:
With this selling pace, we will return to oversold conditions for the S&P 500 this week or next week. Remember, individual investor money has been flowing into the index all year, but professionals (i.e., big banks) have not participated, and they will likely take advantage of this correction in stocks to buy at the bottom and stay in for the long term. This could provide a floor for how far stocks can fall, and we believe we can reach that level within the next one or two weeks as the recovery begins with September.
Bitcoin and Ethereum from the Perspective of a Macro Expert
Following a sharp decline last week along with stocks, Pal turned his attention to Bitcoin and noted that the DeMark sequential indicator and the Relative Strength Index (RSI) signal that the crypto king is about to rise:
Bitcoin dropped throughout the week and retested the key support level around $25,200. Today, DeMark triggered a new daily 9 setup. They have worked well in the past in giving strong signals of a reversal of the downtrend to an uptrend. Additionally, Bitcoin currently has an RSI value of 20 (yes, 20!), which is the most oversold condition since June of last year.
RSI is a widely used momentum indicator that aims to determine whether an asset is overbought or oversold. The DeMark sequential indicator, on the other hand, aims to identify turning points in the market with its nine values, indicating a possible trend reversal.
Pal also commented on the second-largest smart contract platform, Ethereum, stating that the altcoin king is giving a bullish signal in terms of RSI and appears to have formed a significant bullish flag formation since June of last year, if anything.
The bullish flag formation highlighted by the macro expert is an important technical formation that indicates consolidation before the continuation of an uptrend.
