Bloomberg Analyst: Bitcoin (BTC) Struggles with Major Headwind Above $30,000

Bloomberg Intelligence’s Senior Macro Strategist, Mike McGlone, Cautions on Bitcoin’s (BTC) Rally Amidst Formidable Challenges”

According to Mike McGlone, a prominent analyst at Bloomberg Intelligence, Bitcoin’s recent surge above $31,000 is encountering a strong resistance. With over 58,500 followers on Twitter, McGlone expresses his concern that impending economic downturns might prompt Bitcoin to retest the $20,000 threshold.

He highlights the potential impact of various factors such as the Federal Reserve, a forthcoming US recession, a possible equity bear market, and the watchfulness of central banks. These risks could hinder Bitcoin’s progress, despite the optimistic expectations surrounding the launch of US ETFs (exchange-traded funds) and their ability to shield the cryptocurrency.

McGlone emphasizes the ongoing liquidity drain from the markets, attributing it to the rising interest rates set by central banks outside of the United States. Since 2021, Bitcoin has been anchored around the $30,000 mark, influenced by the unprecedented surge in money supply that boosted the valuation of risk assets. However, the withdrawal of liquidity continues as several central banks persist with tightening measures in June. This liquidity drain could present a significant headwind for Bitcoin, even as risk assets experience a rebound due to hopes of a mild recession in the US and easing by the Federal Reserve.

Moreover, McGlone notes that the recent gains in the Nasdaq 100 Stock Index, which Bitcoin has been trailing, may have reached a near-term peak. He points out the limited potential for additional liquidity fuel based on Federal funds futures in one year (FF13). Additionally, he casts doubt on the possibility of BlackRock’s spot Bitcoin ETF application gaining approval in 2023. While this news coincided with Bitcoin’s rally, McGlone believes that economic signals are indicating an imminent recession within the coming months.

Contrary to McGlone’s cautionary stance, another notable crypto analyst, Pentoshi, adopts a more bullish outlook. With a substantial Twitter following of 693,200, Pentoshi predicts that Bitcoin is poised to reach new highs in 2023, specifically targeting the $32,453 level.

Read Also: IMF Economists Argue Against Complete Crypto Bans as Ineffective Long-Term Policy Options

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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