Hedgeye Risk Management CEO Keith McCullough claims that the Bitcoin bubble is bursting now that the cryptocurrency has entered the Quad 4 phase
Keith McCullough Explains why Bitcoin Crashed to $37K
Bitcoin, the most popular cryptocurrency, is battling to recover and is losing ground. On the Bitstamp exchange, it has now dropped to a new intraday low of $37,683, the lowest level since early August.
After recovering to $43,500 on Jan. 20, Bitcoin has lost nearly 13% in just 24 hours. Over the last day, $909 million worth of cryptocurrency has been liquidated.
The stock market in the United States is set to have another rough day, with futures in the red, as investors react to the Federal Reserve’s increasingly hawkish stance.
Hedgeye Risk Management CEO Keith McCullough explains that Bitcoin topped out in November and then broke the trend before entering Quad 4 in late December.
He tweeted last week that he was out of Bitcoin and other risky assets based on momentum.
Hedgeye Employs its Proprietary Growth, Inflation, Policy (GIP) Model
To gauge market sentiment and forecast asset returns, Hedgeye employs its proprietary Growth, Inflation, Policy (GIP) model. It is separated into four economic regimes (quads), with Quad 4 indicating the most negative conditions (slowing inflation and slowing words).
Because the model isn’t flawless, McCullough’s statements should be taken with a grain of salt.
After famously selling his entire Bitcoin stash for $10,000 in early October, the analyst became a target of ridicule within the cryptocurrency community, claiming that the Bitcoin community was driven by narratives and emotion rather than math.
This occurred just before the top cryptocurrency quadrupled in value in a matter of months. To keep track of McCullough’s ill-timed trade, a separate Twitter account was set up.
