A widely followed crypto analyst is warning that investing legend Warren Buffett’s massive sell off of stocks does not bode well for Bitcoin (BTC) and similar risk assets.
In a new video update, Nicholas Merten, the host of DataDash, tells his 511,000 YouTube subscribers that Buffett dumping billions of dollars in stocks is likely a bearish signal for the financial markets.
According to Merten, Buffet’s stock sell-off is another signal that Bitcoin’s latest rally is likely going to lose steam. He also says the king crypto’s recent rally lacks the price patterns that have kicked off prior bull market cycles, and he also does not see anything in the near term that would catalyze a move to the upside.
The massive bull run some people were predicting would come in response to the US banking crisis has not materialized for Bitcoin, according to Merten.
“Look what price is doing now. Looks relatively choppy, inconsistent. Certainly not a Bitcoin bank run as everyone is selling us. So if there’s not some major run to Bitcoin during this time where people are switching to different banks, chasing better yields, losing a bit of trust in the financial system, during this prime time for Bitcoin potentially to be that asset and we’re not seeing it in the price, what is the narrative going to be? What is going to drive Bitcoin’s price higher?”
Merten says that Buffett’s stock dump is a sign that the investing legend does not believe the markets are heading to the upside any time soon, after the Federal Reserve made a series of rate hikes intended to draw down inflation and there is a looming recession.
“[There are] little new narratives that are coming out there that could actually sustain a long-term [Bitcoin] uptrend during a contractionary period. And not to mention during a period of time when there’s a lot of de-risking in the financial space.
Let’s take a look at the titan of investing Warren Buffett. Warren Buffett is usually buying when there’s blood in the streets. He’s usually buying early on during the start of a new cycle. Warren Buffett, Berkshire Hathaway as a whole, his company, is sitting on a massive pile of cash, one of the biggest piles it’s ever had before. And you would think that they’re going out on a buying spree. Nope, over the last quarter, Berkshire Hathaway sold billions in stocks.”
Bitcoin is trading for $27,485 at time of writing, down 1.4% during the past 24 hours.
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