Raoul Pal believes that even if Bitcoin falls back to $60,000, it doesn't mean the bull market is over. He attributes the current trend to changes in global liquidity, arguing that as long as liquidity continues to expand, risk assets will remain supported.

Liquidity remains the main theme

Pal stated that liquidity in major economies such as the US and China is still increasing, which is beneficial for assets like Bitcoin. He said that liquidity is "still flowing in," so there is no reason to be overly pessimistic about the larger crypto cycle.

More like a deep correction in a bull market

He described Bitcoin's drop from $126,000 to $60,000 as "a sharp correction in a bull market," rather than a complete market reversal. Pal said he has seen several 50% pullbacks in bull markets since entering the crypto market in 2013.

Altcoins typically fall more sharply.

Pal also noted that altcoins tend to fall more sharply during Bitcoin pullbacks. He cited Solana as an example, noting its approximately 80% drop during the 2021 bull market followed by a strong rebound. Bitcoin and Ethereum have exhibited similar patterns in past cycles.

This round of correction is slower.

He believes that this round of market declines has made investors more pessimistic, mainly because the correction has lasted longer. Past declines tended to end more quickly and rebound rapidly, while this time prices have been consolidating for months and weakening slowly.

Additional information:Pal believes that if global liquidity continues to improve, the current weakness is more likely to be seen as a reset in the bull market rather than the end of the cycle.