Macro strategist Lyn Alden says that she is not particularly bullish on Bitcoin in 2022, and warns that BTC is still susceptible to a capitulation event.
In a new interview with Stansberry Research, Alden says that she’s looking at the Purchasing Managers’ Index (PMI) to determine the general trend for Bitcoin.
The PMI is an economic indicator that aims to show the health of the manufacturing and service sectors.
“Bitcoin’s major bull runs historically – there’s only a sample size of about four of them: 2011, 2013, 2017 and 2020. Those occurred during rising PMI environments, so economic acceleration. So generally the type of period now has historically not been great for Bitcoin’s price action…
Right now, Bitcoin’s classified due to its volatility as a risk asset by most pools of capital, so I’m not particularly bullish for the calendar year 2022.”
The United States’ PMI currently stands at 58, which is a 9.38% decline from 64 in March 2021.
Alden highlights that a falling PMI amid a tightening monetary environment could serve as catalysts for a capitulation event.
“If you get some sort of market turbulence, you could have a capitulation similar to March 2020 or similar to the fourth quarter of 2018 where the Fed was still trying to tighten into a declining PMI environment.
If you get a capitulation like that, I would consider that a buying opportunity. I don’t know if we’re going to get that or not. We certainly could see a break below $30,000 in that kind of capitulation type of environment.”
Despite her bearish outlook for this calendar year, Alden says she still remains bullish on the benchmark crypto asset in the long run.
“Looking at multiple years, say a three to five-year time period, I’m still structurally bullish on Bitcoin when I look around the ecosystem, I look around what’s happening on the Lightning Network. Every cycle, the infrastructure gets built to absorb new types of capital.
First, it was peer to peer. Then it was the early exchanges that had trouble getting bank access. Then it was the more regulated exchanges, and then it was the more institutional-grade custodians and larger pools of capital coming in. I think that trend is still intact.”
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