Crypto analyst Willy Woo projected a sharp bear market in the coming months linked to tightened macro factors. Digital assets have ticked upwards, soaring to new highs following massive institutional inflows over the past year. These gains could be tested if institutional inflows succumb to heavy headwinds.
Willy Woo Flags Potential Red Wave
The Bitcoin enthusiast made a shocking price prediction for the asset class, considering macro factors. In an X post, he explained that the next crypto price cycle could be brutal due to a business cycle downturn. This phase is often linked to a recession characterized by low productivity, declining GDP and consumer spending, rising unemployment, etc.
While this phase has never been recorded in crypto history, it last occurred in 2001 and 2008, crashing the financial markets. For crypto, two dominant cycles are based on the BTC halving that occurs every four years and the global M2 money supply. For Woo, these cycles will not affect the next bear phase.
Traditionally, traders have almost perfected these cycles, moving assets from Bitcoin to altcoins and vice versa to hedge losses. A cross-section of traders expressed fears following Woo’s projections of macro factors leading to the worst red wave in crypto history.
“We had two 4y cycles superimposed. Now it’s only one: global M2 liquidity. Next bear IMO will be defined by another cycle, people forget about → the business cycle. The last biz cycle downturns that really took hold were 2008 and 2001, before crypto markets were invented. The 2 cycles: the halvening and global M2 liquidity. Central banks inject M2 debasement in 4-year cycles. Both superimpose…”
In 2001, the dot-com bubble triggered a 50% US stock market crash as overvalued tech companies collapsed. Meanwhile, the 2008 financial meltdown led to a 56% decline in the stock market following the mortgage and banking collapse. If similar factors trigger a crypto market crash, bulls would lose positions they had gained over months of inflows.
Furthermore, recent market gains are linked to traditional publicly listed companies through spot ETFs and crypto treasury firms. A sharp pullback could trigger a correction described by Woo. On the flipside, Bitcoin and other assets have been on the receiving end of macro tailwinds this past year. Factors such as the United States’ new friendly stance, which sparked similar sentiments among other nations, and pro-market laws have helped the market.
Source: https://zycrypto.com/willy-woo-projects-next-crypto-doom-cites-global-business-cycle/
