Raoul Pal Just Updated His Outlook on Bitcoin and Ethereum

According to Raoul Pal, a former executive at Goldman Sachs, the stock market is likely to reach a bottom soon, following three weeks of corrective movements. In a recent blog post, Pal, who is an expert in macroeconomics, predicts that the S&P 500 (SPX) will soon become oversold, possibly by the end of this week.

He believes that institutional buyers will take advantage of this opportunity to buy the dip, thereby establishing a market bottom. Pal also notes that retail investors have been bullish this year, but big banks have not.

As a result, the correction in equities may prompt institutional investors to cover their underwater shorts and go long, providing a floor for equity prices.

Pal expects this floor to be reached in the next week or two, as the seasonal trends for September begin to improve. Let’s wait and see.

According to Pal, Bitcoin (BTC) experienced a drop last week, alongside equities. However, he believes that the DeMark sequential indicator and the relative strength index (RSI) indicate that Bitcoin will soon experience a bullish reversal.

Pal notes that Bitcoin has come down to retest key support levels at around $25,200 and a new DeMark daily 9 setup has been triggered, which has worked well in the past to signal a reversal in price.

In addition, Bitcoin’s current RSI of 20 is the most oversold since June of last year.

The RSI is a popular momentum indicator that determines if an asset is overbought or oversold, while the DeMark sequential indicator identifies turning points in a market, with a value of nine signaling a possible trend reversal.

At the time of writing, Bitcoin is trading for $26,125, down 0.3% in the last 24 hours.

“Pal also notes that Ethereum (ETH), the smart contract platform, is showing bullishness on the RSI indicator and is also the most oversold. in RSI terms since June of last year and – if anything – looks to have formed a large bull flag pattern (bullish).