Yerevan (CoinChapter.com) – Bitcoin yielded 45% returns year-to-date, the first confident upside move since 2021. However, the ‘Big Short’ Michael Burry tweet rained on the bull parade. It read one word, “sell,” and the broader market agrees. The Inverse Cramer effect sealed the deal, as Jim Cramer called the bull market start.
Michael Burry tweets “sell,” and here’s why
Michael Burry is a long-time investor and a hedge fund manager. However, the average trader might know the name from the hit film ‘Big Short,’ as he was one of the first people to discover the American housing market bubble in 2008. Thus, Burry’s past insight and expertise made him credible in the crypto community as well.
The tweet in question read “sell,” not specifying what the executive was talking about. However, it does not take long to deduce he meant an upcoming stock market crash due to a possible recession.
Recession incoming – the Big Short Michael Burry tweet says
While the FOMC meeting on Feb 1 delivered a “slightly dovish” conclusion, traders should not take the stock market uptick for a convincing recovery rally just yet. The troubling macro factors that partially caused the market turmoil in 2022 still persist.
Thus, while the geopolitical balance is not restored, and the energy crisis persists, it is not likely that the stock market can make a full recovery. As Bitcoin is highly dependent on the broader economy, the alpha crypto could follow stocks into the pit if they fall further.
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For the time being, stocks might offer some returns but not safety, as experts have been ringing recession bells since 2022. Gregory Daco, the chief economist at Ernst and Young’s EY-Parthenon consulting group, agreed.
So we have not seen the type of severe pullback we usually see at the onset of a recession, where businesses look to cut costs rapidly. The pullback is likely to be softer and more gradual than in the past. We’re not going to see broad-based layoffs.
admitted the expert.
However, he also noted that “there are more indications that the economy is slowing down materially.” “That’s typically the sign of the onset of a recession,” added Daco.
The Big Short Michael Burry tweet seems to agree with the grim predictions. While he provided no further details, the “sell” tweet evoked a lot of discussion on the platform, ranging from supportive to indignant. In any case, the Michael Burry tweets coincided with another effect widely known in the crypto community – the Inverse Cramer.
The Inverse Jim Cramer effect strikes again – bad news for Bitcoin?
On Jan 31, CNBC’s financial analyst Jim Cramer told investors that the market is in bull mode, so declines represent opportunities to buy on a dip.
If we’re in a bull market, and I think we are, you have to prepare yourself. We have to prepare for the down days now because in a bull market, they’re buying opportunities. […] Even if it doesn’t reverse today, well then, there’s always tomorrow, so don’t think of betting against it.
Bitcoin bulls are not convinced. The crypto market participants had noted multiple occasions when the expert called the wrong shots, wrong enough to be the butt of a running joke and earn the “inverse Cramer effect” reputation.
Also read: Top 5 AI Cryptos Worth Buying In February 2023.
As one of many examples, Cramer consistently shilled META stock in his Mad Money segment. However, as the Metaverse platform stock crashed 65% throughout 2022, the anchor issued an official apology to all the investors who were sadly unaware of the Inverse Cramer law.
Bitcoin weekly chart shot a warning as well.
The alpha crypto flashed bearish warnings on the weekly chart, despite the uptrend. The charts printed a formation dubbed the ‘death cross’ between the 50-week exponential moving average (EMA-50; orange wave) and the EMA-200 (blue wave).
In short, a death cross occurs anytime a short-term MA crosses below a long-term MA. It signifies a bearish period ahead for as long as the long-term MA retains its dominant position. The lowering trading volumes back the bearish analysis.
Also read: Bitcoin Could Easily Rally to $25K — But What Afterward?
Combined with the Michel Burry tweets, the Inverse Cramer Effect, and the persisting recession fears, Bitcoin’s 2023 prospects don’t look optimistic. While the relief rally might still continue, the $25,000 limit will remain an important milestone for the alpha crypto. In any case, traders should watch the macro factors carefully to determine the direction of upcoming fluctuations.
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