Bitcoin is once again stirring extreme emotions, but Raoul Pal argues that fear is a signal, not a warning. In his assessment, the current correction looks like the final bottom before a strong upward movement. Therefore, Bitcoin is today closer to the beginning of the next wave of growth than most investors want to admit.
The cryptocurrency market is going through a tough time, but history shows that such phases often precede the strongest price movements.
Fear in the market and the behavior of Bitcoin's price
Raoul Pal, during an interview on YouTube, points out the extremely negative sentiment of investors. In his opinion, the market behaves like a panicked herd, and emotions dominate over analysis. It is precisely then, as he emphasizes, that the best investment opportunities arise. Bitcoin, in his view, is in a zone where the risk of declines is decreasing.
Pal refers to the October liquidity liquidation related to TGA actions and the risk of a government shutdown. This process hit the liquidity-sensitive assets, namely cryptocurrencies, the hardest. Bitcoin experienced a sharp decline, which Pal describes as 'nuclear.' However, the market quickly began to build a price base at these levels.
Pal considers increases of 20–30% in one day as a key signal of a trend change. Such moves usually occur after the capitulation of sellers. Is this the market bottom? Pal believes that an absolute minimum is not necessary for an ideal entry. In his opinion, the current price range is a classic 'buy the dip' zone.
Bitcoin and the upcoming surge of liquidity
Pal presents a very specific macroeconomic scenario that favors risk assets. According to him, the global financial system is heading towards a massive liquidity injection. The Fed has halted quantitative tightening and is preparing repo tools for year-end financing. Banks are struggling to roll over debts, so liquidity must appear.
The key role is played by the change in SLR, or Supplementary Leverage Ratio. Lowering the risk weight for Treasury bonds will allow banks to buy them on a massive scale. Pal estimates that this will generate an additional $3–5 trillion in liquidity in the system. Some economists, like Steve Miran, even advocate for a risk weight of 0%.
Additionally, there is a shift in debt management from the Fed to the Treasury Department. Such a move facilitates financing the deficit and increases credit access for ordinary citizens. Historically, Bitcoin reacts positively to such an environment. The more money in the system, the greater the demand for supply-restricted assets.
Pal also points to other factors supporting liquidity:
possible interest rate cuts,
1.5 trillion USD in new deposits from stimulus,
a decrease in mortgage interest rates,
the explosion of the stablecoin market,
money printing in China and fiscal stimulus in Japan.
These elements together create, as he puts it, a global liquidity game. Bitcoin, as the most liquid and global crypto asset, is expected to be the main beneficiary.
Market psychology and the road to 'Valhalla'
Raoul Pal strongly emphasizes the psychological aspect of investing. He points out that investors currently do not want to hear positive scenarios. Fear, aggression, and mutual accusations dominate on social media. This is a classic phase at the end of a correction:
“No one wants to hear bullish ideas and everyone is scared, wanting to throw shit at each other, but the road to Valhalla is already very close.”
Pal treats this statement as a summary of the current stage of the market. According to him, we have gone through an extreme liquidity squeeze that has cleared the market of excessive leverage. Now, the market structure is healthier and ready for a new impulse. Bitcoin in such an environment can react very dynamically.
Pal predicts that 2026 could be an 'extraordinarily powerful year' for cryptocurrencies. He believes liquidity will appear almost everywhere at the same time. Regulatory clarity, like the planned Clarity Act, will further reduce investor uncertainty. This combination creates a foundation for a strong upward trend.
Does this mean guaranteed increases? Pal emphasizes that nothing is certain. However, he believes the risk-to-reward ratio looks very favorable right now. Therefore, he considers the current months, especially November and December, to be an opportunity zone.
In summary, Pal sees Bitcoin on the brink of a new phase of the cycle. Investor fear, improved liquidity, and regulatory changes create a rare combination of factors. His message is simple: you don’t need to catch the perfect bottom to benefit from the upcoming move. It is enough to understand where the market is.
To read the latest cryptocurrency market analysis from BeInCrypto, click here.
