According to Bloomberg analyst Mike McGlone, the worst may not be over for Bitcoin (BTC) — here’s why
Mike McGlone, senior macro strategist at Bloomberg Intelligence, predicts that Bitcoin (BTC) will fall on recessionary headwinds.
In a new edition of the Crypto Outlook, McGlone says the worst may not be over for Bitcoin and forecasts a liquidity squeeze in the second half of 2023 due to a US recession.
“June could be more of a 1H (first half) bias for rising risk assets and Bitcoin in a worst-is-over scenario, or there could be a US recession.” Our bias is the latter, especially as the Markets appear to have priced in a bullish outcome due to the long and variable lags of aggressive central bank rate hikes, which are still rising.”
McGlone says that while markets have rallied recently, he doesn’t think their strength is sustainable. He predicts that the general downtrend of the market will continue.
“The potential for the rising Nasdaq 100 stock index to lift all boats could be temporary. The 100-week moving averages chart shows downtrends for the stock index and bitcoin. It’s about whether the worst is over or whether the trend is respected, especially when prices have started to rise again.
Our downside perspective is guided by the lessons of liquidity pumps that are reversing and still falling as shown by Federal Funds Futures one year (FF13) ahead. It could take a fall in share prices for interest rates to go down.”
McGlone, who previously warned Bitcoin could fall as low as $7,000, says an expected US recession is likely to push risky assets like BTC significantly lower.
“Bitcoin’s peak of around $30,000 in 2023 compared to the 100-week moving average of around $33,000 could suggest that the pre-eminent 24/7 global risk indicator is on the wane ahead of the unprecedented 2020-21 liquidity surge declining in importance around $7,000 from the comfort zone. The fact that the widely expected US recession has not yet started could put risky assets under corresponding pressure.”
Bitcoin is trading at $27,074 at the time of writing, up 0.7% over the past 24 hours.
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