Leading crypto, Bitcoin (BTC), finds itself under the scrutiny of a senior macro strategist at Bloomberg. With a foresight that carries significant weight, this strategist unveils an alarming price prediction, suggesting that the ongoing decline in Bitcoin’s value might persist in the foreseeable future.
In the most recent edition of his report titled “Crypto Outlook, June 2023,” Mike McGlone presents a viewpoint that indicates Bitcoin may not have yet overcome its most challenging phase.
McGlone asserts that considering the prevailing patterns, multiple factors influencing the cryptocurrency market, and the US Federal Reserve’s inclinations, the future prospects for Bitcoin seem to lean towards a bearish trajectory.
Concerns Over Bitcoin’s Price Reversion Risks
In his latest analysis, McGlone draws attention to the historical trading patterns of Bitcoin. McGlone emphasizes that at the close of 2019, the cryptocurrency was valued at approximately $7,000, but subsequently experienced a substantial liquidity boost. This remarkable surge raises valid concerns about the possibility of price reversion risks.
McGlone highlights the significance of the month of June as a potential turning point, where the prevailing bias towards rising risk assets, including Bitcoin, will either persist or give way to a looming US recession.
Moreover, by any move central banks, according to McGlone, may have unforeseen consequences that could adversely impact Bitcoin and other risk assets in the near future.
As of writing, Bitcoin’s current value at CoinGecko stands at $27,152, underscoring the downward trajectory of its 52-week moving average, which stands in stark contrast to the initial upward trend witnessed at the onset of the pandemic. The alpha crypto has rallied a meager 1.7% in the last week.
The Impact Of Central Bank Rate Hikes
McGlone emphasizes the significance of ongoing central bank rate hikes in shaping the future of Bitcoin. As central banks take a more aggressive approach to tighten monetary policy, the resulting increase in borrowing costs has the potential to dampen economic growth and market sentiment. This, in turn, may affect the appetite for risk assets like Bitcoin.
BTCUSD slightly above the $27K level on the weekend chart: TradingView.com
Moreover, the strategist suggests that the market’s optimism surrounding central bank rate hikes might be misplaced. While these actions aim to curb inflationary pressures, there is a risk of overcorrecting and inadvertently triggering an economic slowdown or even a recession. In such a scenario, Bitcoin could be particularly vulnerable to a decline in value as investors seek safer havens for their capital.
As McGlone paints a bearish picture for Bitcoin, it is crucial to acknowledge the inherent uncertainty in predicting the future of any financial asset.
-Featured image from Think Magazine