Jamie Dimon, CEO of JP Morgan, forecasts another slight 20% decline in the S&P 500 from current levels, factoring in the global macroeconomics. How will Bitcoin react?
In an interview with CNBC, Jamie Dimon said the US and the world are likely to be pushed into recession in six to nine months. He predicted the S&P 500 could fall “another easy 20%” from current levels. He added, “The next 20% would be a lot more painful than the first.”
How accurate were Dimon’s previous predictions?
The community believes Jamie Dimon is known for making predictions Fear, Uncertainty and Doubt (FUD). He’s wrong about most predictions. Earlier in April 2020 he predicted a bad recession in its annual letter to shareholders. They stopped buying back JP Morgan shares. The stock then surged 52% from April 2020 to April 2021.
Source: TradingView
In his April 2021 annual letter to shareholders, he said that “the pandemic will end with a recovery in the US economy, the US economy is likely to boom,” adding, “this boom could easily continue into 2023.” The opposite happened . The current economy is in worse shape than it was in April 2021.
If the index falls another 20%, markets will know in 6 to 9 months.
What does the chart say?
Is there a similarity between the 2008 chart of the S&P 500 and the 2022 chart? In 2008, when the index fell nearly 10% from its all-time highs, it retested the 200-day simple moving average (SMA). There was a head and shoulders formation and the index broke the neckline in June 2008.
After that, the market experienced a steep decline of almost 50% before bottoming out.
Source: TradingView
Even in 2022, when the S&P 500 retested the 200-day SMA, it was about 10-12% below its all-time highs. The index formed a similar head and shoulders pattern after being rejected by the 200-day SMA. The neckline was broken in September 2022. Is the market poised for a steep move down?
Source: TradingView
The impact on BTC
If Dimon’s prediction of another 20% downturn proves correct, the community fears it will impact cryptos. There is a high correlation between the S&P 500 and BTC. The effect is multiplied when it comes to bitcoin. From February to March 2020, when S&P fell 35%, Bitcoin’s price fell more than 60%. Currently, S&P is down nearly 25% and Bitcoin is down more than 70% against its ATHs.
If the S&P 500 falls 20%, Bitcoin can see more than 50% downside from current levels. Some traders believe this could be a buying opportunity.
Would mean around $10,000 to $12,000 bitcoin and alts drop another 60% to 80%. Make it happen!
— Bob Loblaw (@Bob_Loblaw2022) October 10, 2022
Is JP Morgan CEO on the money this time?
To be[In]Crypto’s latest Bitcoin (BTC) analysis can be found here
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