Bloomberg Intelligence’s senior macro strategist Mike McGlone is predicting that Bitcoin (BTC) will drop lower due to recessionary headwinds.
In a new Crypto Outlook edition, McGlone says that the worst may not be over for Bitcoin, predicting a liquidity crunch in the second half of 2023 due to a US recession.
“June may show more of the 1H (first half of the year) bias for rising risk assets and Bitcoin in a worst-is-over scenario, or it could roll over into a US recession. Our bias is the latter, notably as markets appear to have priced in an optimistic outcome from the long and variable lags of aggressive central-bank rate hikes, which are still rising.”
McGlone says that while markets have bounced recently, he does not believe their strength is sustainable. He predicts a broader downward market trend will continue.
“The potential for the rising Nasdaq 100 Stock Index to lift all boats may be ephemeral. The graphic of 100-week moving averages shows downtrends for the stock index and Bitcoin. It’s a question of the worst being over or respecting the trend, notably as prices have bounced.
Our downward perspective is guided by the lessons of liquidity pumps that reverse and are still dumping, as indicated by Federal funds futures in one year (FF13). It may take a decline in equities for rates to fall.”
McGlone, who previously warned Bitcoin could dip to as low as $7,000, says an expected US recession is likely to push risk assets like BTC much lower.
“Bitcoin’s high of about $30,000 in 2023 vs. the 100-week mean around $33,000 may show the pre-eminent, 24/7, globally traded risk indicator feeling gravity from the comfort zone around $7,000 before the unprecedented 2020-21 liquidity boost. That the widely expected US recession has not yet started may pressure risk assets accordingly.”
Bitcoin is trading for $27,074 at time of writing, up 0.7% during the past 24 hours.
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