Bitcoin Faces Potential Downturn or Surge to New ATH in Q2

2 min

Jamie Coutts, Chief Crypto Analyst at Real Vision, warns of potential volatility for Bitcoin. His new Bitcoin Derivatives Risk Score (DRS) model indicates two possible outcomes: a significant downturn or a rise to new all-time highs (ATH).

Bitcoin’s Q2 Outlook

  • Recent "Cat 5 euphoria" in Q1 2024 led to a 30% pullback.
  • Comparable events in 2019 saw declines of 50%, escalating to 70% with COVID's impact.
  • Current market conditions resemble 2019 more than 2021 due to different liquidity circumstances.
  • Bitcoin's DRS is currently in a low-risk quantile, indicating minimal predictive power.
  • If Bitcoin has peaked, a significant decline may follow, but a rebound is also possible.

Global Liquidity On The Rise

  • Coutts highlights an upcoming inflection point in global liquidity that could stimulate the derivatives market, which is four times larger than the spot market.
  • This influx may propel Bitcoin towards new ATHs by May or the end of Q2.
  • The Global Liquidity Index has been contracting for over three years, a record duration.
  • Coutts emphasizes the necessity for liquidity injections to prevent systemic failure in debt-heavy economies.

At press time, Bitcoin traded at $87,703.