Bloomberg Senior Macro Strategist Predicts More Pain Ahead for Bitcoin

in his latest reports Titled “Crypto Outlook, June 2023,” Mike McGlone, senior macro strategist at Bloomberg, predicts more pain for bitcoin (BTC) and the broader cryptocurrency market. McGlone argues that despite a price rally in 2023, the risks to the downside remain tilted for the Bloomberg Galaxy Crypto Index.

Is bitcoin doomed?

According to McGlone, the cryptocurrency faces a number of hurdles, including the prospect of a US recession, a potential equity bear market, cautious central banks, and high interest rate competition. These factors, combined with the abundance of speculation leading up to a 2021 peak, suggest that the outlook for the crypto market is bearish.

In addition, McGlone pointed out that bitcoin’s May weakness, along with copper and equities in China, is unusual compared to the stalwart Nasdaq 100 stock index. While the potential exists for the Nasdaq to lift all boats, it may still run counter to rising Fed rate-hike expectations.

Additionally, McGlone suggests that bitcoin, often called digital gold due to its perceived status as a store of value, may not be able to outperform traditional safe-haven assets in a US economic contraction. This is because bitcoin is still relatively young compared to gold, which has been used as a store of value for thousands of years. As a result, investors may be more likely to flock to gold in times of economic uncertainty rather than new assets like bitcoin.

In addition, falling commodities, producer prices, and bank deposits can serve as disinflationary signals for the Federal Reserve to tighten. These factors suggest that the Bloomberg Galaxy Crypto Index is biased to the downside, and that investors should remain cautious.

As informed of By NewsBTC on May 22nd, Mike McGlone highlights the historical pattern of bulls and bears in bitcoin, which are closely related to liquidity. According to McGlone, bitcoin at its current price level of around $27,000 could be at risk of a reversal, given that it was only $7,000 at the end of 2019 before a massive liquidity pump in 2020.

McGlone’s analysis also indicates that bitcoin’s downward trajectory, as demonstrated by its 52-week moving average, is the opposite of the upward trend experienced at the start of the pandemic. This shows that cryptocurrency is susceptible to booms when liquidity is abundant but vulnerable to busts when liquidity is removed.

McGlone’s latest analysis aligns with his previous thesis that the outlook for bitcoin and the broader cryptocurrency market is bearish given the prospect of a US recession, a potential stock bear market, cautious central banks and higher interest rate competition.

Is BTC about to take off?

On the other hand, well-known crypto analyst, Crypto Con has recently expressed his continued bullish on Bitcoin, citing the Pie Cycle Top indicator as evidence of the cryptocurrency’s potential for continued upward movement.

According For CryptoCon, the yellow 111-day moving average (MA) has started to rise, indicating that bitcoin is experiencing a positive trend. Additionally, bitcoin is retesting the 111DMA line as support, rather than continuing on a parabolic trajectory, which usually signals a market top.

Crypto Con acknowledges that sometimes it can take a while to bounce back, but he says this has been nothing but a bullish run for bitcoin. This is because the Pie Cycle Top Indicator is a reliable tool that has historically predicted major market tops and bottoms in the cryptocurrency market.

The Pie Cycle Top indicator measures the relationship between the 111DMA and 350DMA, and when the two lines cross, it can suggest a potential market top or bottom. The fact that the yellow 111DMA is looking bullish suggests that bitcoin could be heading towards the bottom of the market, which is a bullish signal for investors.

At the time of writing, bitcoin, the largest cryptocurrency by market capitalization, is trading at $27,000. Over the past 24 hours, BTC price has remained relatively stable, showing a sideways price action with a slight increase of 0.1%.

Featured image from iStock, Chart from TradingView.com