In a recent tweet, Raoul Pal, co-founder and CEO of the Global Macro Investor, warned that the stock market may be headed for rough waters – and this could spell trouble for cryptocurrencies.
Pal told his 927K Twitter followers that he does not necessarily believe that crypto markets are headed for new lows. However, he warned that current macroeconomic conditions are indicative of an impending major correction.
According to the former Goldman Sachs executive, this correction could have a significant impact on digital assets, dragging them down with the rest of the market.
“Seeing energy stocks, oil commodities, etc. all in the red start to raise the risk of a full ‘correlation’ of one accelerated panic.
The only place to hide would be the dollar and probably bonds (because everyone is short).
And yes, crypto would get caught up too (not new lows).”
Pal also touched on the Nasdaq, saying that, from a technical analysis standpoint, the index is at a critical juncture and could break below critical support levels, which would signal further downside. This is something that investors need to be aware of as it could have significant implications for the market going forward.
“If the #NASDAQ breaks the recent low…we’ve got a significant amount of downside to come in the coming weeks…where every position gets taken out and shot.”
The failure of equities to hold has exposed risk of severe downside if the low is taken out… 1/ pic.twitter.com/P402j7Kglu
— Raoul Pal (@RaoulGMI) April 22, 2022
While Pal did not give a specific timeframe for when this correction might occur, he cautioned investors to be prepared for it. Given the nature of the market, Pal advised investors to keep an eye on the relationship between stocks and cryptos as we move forward.
In a recent interview with Real Vision, the macro guru said that a market correction would be just noise within a ranging market- a complex and ever-changing economic ecosystem.
“…Obviously, crypto will get caught up in this [downside] and will go lower but I think we are all used to that going up and down right now. I don’t think it takes out the low so I just think it is more noise and we are in this wide sloppy range we’ve been in for the last year and a bit.”
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"If the #NASDAQ breaks the recent low… we've got a significant amount of downside to come in the coming weeks…where every position gets taken out and shot…" https://t.co/30Ncq9hkrO pic.twitter.com/1rrzWi6tPI
— Real Vision (@RealVision) April 22, 2022
While it’s still too early to say for certain what will happen, it’s worth keeping an eye on the relationship between stocks and crypto in the coming months.