Ah, dear friends! Gather ’round as we recount the tale of Bitcoin, that mischievous rascal, which has soared to a dizzying height of over $111,800 on this fine day of May 22! Our gallant Raoul Pal, a former hedge-fund strategist and co-founder of Real Vision, has declared that this rally is but a mere prelude! “The Banana Zone has commenced!” he exclaims, as if announcing the arrival of a grand feast. “Indeed, Bitcoin has reached an all-time high! But fear not, for the alts shall follow suit… Ensure your Bitcoin reserves are ample!” 🍌💰
Now, what is this “Banana Zone,” you ask? It is the whimsical phase where liquidity, like a mischievous sprite, nudges investors out of their comfort zones. This liquidity, he argues, is not born of inflation, but rather from the looming specter of policy interventions in the bond market. A most curious affair, indeed!
Why This Bitcoin Cycle Is Different
“During Trump’s first term, the dollar plummeted. And guess what? It’s happening even faster now! A weak dollar is the secret ingredient to keep the world spinning. The 12-month gain in Bitcoin after significant dollar drops has been a staggering 119%, 175%, even 592%! That’s the denominator effect, my friends!”
He dismisses fears of a tariff war as mere background noise: “It’s all just a negotiation. They’ll reach a sensible agreement because the US is in the business of selling bonds, not blowing up trade!”
As he celebrates Bitcoin’s triumph, Pal argues that Ethereum and high-beta Layer-1s are poised to outshine once the ISM manufacturing index—currently sulking below 50—begins to rise: “The financial-conditions index I monitor is screaming upward and leads ISM by nine months. When ISM crosses 50, that’s when we shall witness alt-season! The ETH–BTC ratio is stabilizing; Bitcoin dominance has peaked!”
Solana, SUI, Dogecoin And $140,000 Per BTC
He points to Solana and Sui charts “forming classic cup-and-handles,” then offers a cheeky jest about Dogecoin: “The most amusing outcome would be if Doge, from its humble beginnings, outperforms Bitcoin and becomes the hardest currency in the world! That would surely ruffle some feathers—but the chart suggests it’s a possibility!” 🐶💸
Despite the exuberance, Pal adds a caveat linked to his global-M2 model: “Liquidity suggests we should be over $140,000 by July. However, July–August may bring a sideways ‘correction phase 2’ as the dollar makes a reflexive rally. That’s the moment to take some lifestyle chips off the table—if you so desire. Nothing about the broader cycle changes!”
He reiterates that the full Banana Zone extends into 2026, barring any unforeseen policy shocks: “Every cycle, people wail about ‘diminishing returns.’ Yet, every cycle, they are proven wrong!”
Pal’s thesis boils down to three interlocking forces: policy-driven liquidity, a structurally weaker dollar, and bond-market triage that channels capital into scarce assets. Whether traders embrace the “Banana Zone” moniker or not, the markets seem to be in agreement. “I’ve been telling the same tale since the 2022 low—and fortuitously, it has been accurate,” Pal concludes. “You may disregard the wine recommendations, but do not overlook the liquidity charts!” 🍷📈
For investors, the message is crystal clear: if the bond market compels the Fed’s hand, the path of least resistance for Bitcoin—and soon, perhaps, for Ether and its companions—remains upward.
At press time, BTC traded at $110,642.
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2025-05-22 21:54