A Bitcoin bottom might not be in, given that the team at Goldman Sachs research expects the S&P500 to drop by 9% in the next three months.

Bitcoin’s correlation with the traditional markets has often been measured against the two popular indices: the S&P500 and the Nasdaq. A drop in either of the two indices is usually followed by a similar decline in Bitcoin and vis versa. The correlations could be crucial in determining a timeframe for a Bitcoin bottom in the current bear market.

The S&P500 Could Drop by 9% in the Next Three Months — Goldman Sachs

According to the team at Goldman Sachs Research, the S&P500 could drop by an additional 9% in the next three months, entering into the first quarter of 2023. The team added that the index would rebound ‘after the Federal Reserve’s tightening cycle ends in May.’

A Bitcoin Bottom Might Not Be In

Therefore Bitcoin’s fate in the crypto markets will continue to be affected by the global macroeconomic environment despite the number one Crypto dropping by 77.57% from its $69k peak value in November 2021 to the local low of $15,476 set on November 21st, 2022.

Bitcoin potentially falling below the recent low of $15.4k was also explored by Veteran Bitcoin analyst Will Woo in a recent Tweet, whereby he explained that a Bitcoin bottom is getting closer to his ‘max-pain’ model, which has a floor at around $9,100.

He explained that according to past data, Bitcoin’s ‘price reaches macro cycle bottoms when 58%-61% of coins are underwater (orange).’ He shared the following chart demonstrating his idea, with the green shading representing coins locked inside the Grayscale Bitcoin Trust (GBTC).

What the One-Day BTC/USDT Chart Says

Further checking the one-day BTC/USDT chart below, it can be observed that $14k and $10k are the next significant macro support levels for Bitcoin after it lost $20k due to the ongoing FTX situation. At the same time, bitcoin continues to trade in bear territory below all crucial moving averages: 50-day (red), 100-day (yellow), 200-day (green) and 200-week (black).

Genesis Filing for Bankruptcy Could Trigger a Drop to $14k or $10k

Concerning what might cause a Bitcoin to drop to lower levels, the FTX contagion has roped in Genesis Global Trading and its parent company, Digital Currency Group. At the time of writing, Genesis is yet to resume withdrawals on its lending platform and continues to affirm that it will not file for bankruptcy.

However, if Genesis files for bankruptcy, it could catalyse another massive selling event that could open the doors to $14k or even $10k as the S&P500 also experiences its 9% drop forecasted by the team at Goldman Sachs.

But only time will tell whether the above forecast pans out.

As with all analyses on price action, crypto traders and investors are reminded that the above is not meant to be financial advice of any kind. Views expressed herein are those of the author and do not necessarily reflect those of Crypto Saving Expert.

（By John P. Njui）