Crypto analyst Jason Pizzino says a rare macro indicator is hinting that risk assets including Bitcoin (BTC) could’ve already bottomed and are getting ready to rally.
In a new strategy session, Pizzino tells his 290,000 YouTube subscribers that he’s watching the consumer confidence index (CCI), which tracks households’ outlook on potential future economic development based on monthly surveys.
Citing data from Sentimentrader, Pizzino says that the CCI essentially acts as a contrarian indicator for the stock market, with downward-moving CCI readings signaling future market growth and upward-moving readings suggesting exuberance.
“Like many sentiment indicators, it’s a contrarian indicator. High readings as the masses become overly bearish and reversals from high readings tend to be bullish for stocks, so you want to see reversals from higher readings. The masses were very very bearish at the bottom.”
With CCI in the midst of confirming a reversal and crossing below the 70 level, Pizzino says that based on history, stocks and cryptocurrencies should be moving up in the next three to six months, which would be the “max pain” move and could send Bitcoin “off to the races.”
“A lot of the data is suggesting these markets are going to be up in the next, potentially, three to six months. Three to six months from now, it’s not that far away. Day-to-day, it’s anyone’s guess, but longer term, everything is looking pretty well up.”
Looking at Bitcoin, Pizzino says that a modest move to key support levels is more likely than a dramatic collapse to much lower prices. He says he would use a correction to the $23,000 level as a “buy the dip opportunity.”
“Is it going to be that collapse to the downside that I think a lot of people are waiting for? This collapse past $19,500 or $15,500? It doesn’t seem so at this stage. Can it happen for Bitcoin? Of course, there’s always going to be any sort of possibility of wicks when liquidity is dry, and it’s especially dry when the market is quiet and you’re getting those small trading ranges, compared to a move to the downside and the moves to the upside.
But in terms of the closing basis, on multiple weekly and monthly [candles], at this stage, it’s looking unlikely that we’re going to start closing under these levels to put in new fresh lows, based on timing, based price, based on history, it doesn’t seem likely.”
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The post Bitcoin Could Be ‘Off to the Races’ As Rare Contrarian Indicator Flashes, Says Analyst Jason Pizzino appeared first on The Daily Hodl.
