Worst Part of Bear Market Over, Macro Strategist Lyn Alden Explains

Macro strategist Lyn Alden says that the worst part of Bitcoin’s bear market is likely over after a shaky first half of 2022 during which the flagship cryptocurrency lost over 50% of its value.

Bitcoin (BTC) looks to be back on its way to recovery following tumultuous weeks with mass liquidations and insolvencies in the crypto space. This according to macro analyst Lyn Alden, who recently appeared on the Hard Money Show, noting that we have the worst part behind us. Speaking with Natalie Brunell she said:

“Back when Bitcoin was trading around $30,000, there were some signs that maybe the bottom was in. We had some capitulation, of course. This whole thing was another leg lower and so it does seem at the moment at least that the worst of the selling – the rapid selling, the liquidations are behind us.”

Nevertheless, despite being presented with a good buying opportunity currently, one last dip should not be factored out, Alden warns:

“There’s still not a lot of bullish catalysts at the moment in terms of the macro landscape, and so I wouldn’t rule out obviously further down movements in the price, but I do think that based on most ways of kind of valuing Bitcoin or looking at Bitcoin’s history, we are in kind of a deep value zone here…

I don’t think investors should ever rule ever out more downward legs as long as the macro situation is this uncertain.”

With price inflation hoovering over the world, the strategist stressed that Bitcoin remains a strong hedge against this kind of inflation:

“There’s different types of inflation. There’s monetary inflation and then there’s price inflation that often comes with a lag after that monetary inflation, and what we’ve actually seen for the most part is that Bitcoin is correlated very strongly with money supply growth, global M2 especially as measured in dollars, and so over the past couple years as we got that huge ramp up in in broad money supply around the world, Bitcoin did very well.

As one would expect, we started to get a reduction in the amount of money supply growth, and you started to see the Fed and some other central banks actually try to push back on the price inflation that was materializing. That’s when Bitcoin has and many other assets for that matter have begun to struggle. So I would say that Bitcoin’s been a useful hedge against monetary inflation, but that precedes the actual price inflation.”