Raoul Pal: Global Money Flow is the Key to Directing BTC, Market Currently at Historic Oversold Levels

Renowned market analyst Raoul Pal has just published a detailed analysis on X, dismissing recent pessimistic views about the future of the cryptocurrency market. According to Raoul Pal, although many feel discouraged by the current market conditions, the fundamental numbers tell a completely different story. He emphasizes that the 90% correlation between global payment flows and BTC (as well as 97% with the NDX index since 2012) indicates that this process is not random but driven by deep macroeconomic factors.

Payment Flows: The Fundamental Driver of the Market

Raoul Pal states that global payment flows are growing at approximately 10% annually and show no signs of slowing down. The GMI (Global Financial Conditions Index) leading payment flows by about six months remains in a monetary easing cycle, creating a strong foundation supporting risk assets like cryptocurrencies. U.S. payment flows are temporarily held back during stock market closures, but this index still leads crypto by about three months. Since the three-month low, U.S. payment flows have started to accelerate again, signaling a positive outlook for the next phase.

Bank Credit and Stablecoins: New Liquidity Channels

Raoul Pal points out that banks are utilizing the eSLR mechanism (increasing payment flows through credit and absorbing government bonds) to boost liquidity into the system. Tax refunds are currently being recorded on bank balance sheets, increasing credit pressure and thus raising payment flows. At the same time, the U.S. is expected to continue cutting interest rates, which will increase disposable income and encourage markets to accept more risk.

The stablecoin market is also booming, with issuance expected to increase by 50% in 2025 and continue accelerating. Trading volume in stablecoins has reached trillions of USD. The CLARITY bill is anticipated to pass, addressing the demand from many banks and asset managers seeking to utilize blockchain technology, opening new liquidity channels into the market.

Policy Support and Institutional Mechanisms

Raoul Pal notes that U.S. government support for the crypto market has reached all-time highs. Cryptocurrency advocacy groups will be established one after another, likely speeding up the ecosystem’s development. These factors combined create a very favorable environment for growth.

Technical Signals: A Historic Reversal Opportunity

From a technical perspective, Raoul Pal highlights that the market is currently in the most oversold condition in history, according to most indicators. BTC is now at $71.21K. The weekly DeMark indicator will provide strong support in about two weeks (this indicator is available on TradingView). The daily DeMark indicator is also in a choppy state, indicating deep oversold signals. Any weakness in the coming weeks will align both daily and weekly indicators, creating a potential full trend reversal.

Outlook and Risks Ahead

Raoul Pal warns that the main risk factor is the duration of high oil prices. However, he affirms that the next two weeks are critical to monitor, and when macroeconomic factors align with technical signals, positive outcomes will emerge. Raoul Pal forecasts that the next phase will see a strong rebound from current levels.