Macro strategist Henrik Zeberg argued that the recent surge in Bitcoin (BTC) price is not the beginning of a new bull market, outlining a rather sharp bearish scenario for the cryptocurrency market. Speaking in an interview with Michaël van de Poppe, Zeberg characterized the current movement as a “bear market rally” and, in market terminology, a “fools’ rally.” Zeberg believes Bitcoin could continue its upward trend in the short term, but could then experience a massive crash of around 90% from current levels.
According to Zeberg, the recent strong recovery in Bitcoin does not mean the long-term downtrend in the market has ended. The strategist stated that the increase in risk appetite spread first to stocks, then to Bitcoin and other cryptocurrencies, and that the current rise is a result of this capital rotation. Zeberg said, “What you’re seeing right now isn’t a new bull market. This is actually a bear market rally. It’s also called a ‘fools’ rally’.”
Analyst Expects Initial Bullish Trend in Bitcoin
However, Zeberg does not expect the decline in Bitcoin to begin immediately. Recalling his previous prediction that BTC could rise again to the $115,000-$120,000 region, the analyst argued that a second strong rejection at these levels would lead to a sharp price drop.
Zeberg’s bearish outlook centers on the global economy and the US dollar. According to the strategist, the current weakness in the dollar index will not be permanent as the US economy heads towards recession. He states that if the dollar starts to strengthen again, risky assets, especially Bitcoin, will come under serious pressure, suggesting that the crypto market could face one of its harshest bear markets to date.
Zeberg also noted that Bitcoin has yet to be truly tested in a prolonged recession. Recalling that Bitcoin lost over 60% of its value in about four weeks during the short economic downturn of COVID-19, the strategist said that sell-offs could be much more severe during a deeper economic crisis.
According to the analyst, one of the biggest misconceptions in the market is the belief that increased liquidity or positive regulatory developments for the crypto sector will inevitably drive prices upwards. Zeberg argues that if economic activity deteriorates severely, liquidity support alone will not be able to stop the decline in risky assets, and Bitcoin, like other risk assets, could be heavily affected.
