Bitrabo Editorial
Bitcoin (BTC), the leading cryptocurrency, is under the expert observation of a macro strategist at Bloomberg. According to this strategist, who has significant foresight in cryptocurrency trading, Bitcoin’s decline in value may continue in the near future. Mike McGlone, in his report entitled “Crypto Outlook, June 2023,” cites prevailing patterns, market factors and Federal Reserve decisions as an indication of a bearish trajectory for Bitcoin.
Bitcoin’s Reversion Risks
McGlone’s most recent analysis reveals Bitcoin’s trading history, emphasizing that the cryptocurrency’s value was approximately $7000 at the end of 2019, but substantially increased liquidity. This massive surge has raised concerns about the possibility of a price reversion risk. McGlone points out that June could be a decisive month, where risk asset market biases favoring Bitcoin might continue or give way to an impending US recession. Central banks, according to McGlone, could trigger unpredictable consequences that could negatively affect Bitcoin and other risk assets.
As of writing, Bitcoin’s value on CoinGecko stands at $27,152, underscoring its downward 52-week moving average trend, which is a significant contrast to its initial upward trend during the pandemic onset. The premier cryptocurrency has only rallied a meager 1.7% in the previous week.
Central Bank Rate Hikes Affecting Bitcoin
McGlone stresses the importance of central bank rate hikes in shaping the future of Bitcoin. As central banks aggressively tighten monetary policies, rising borrowing costs have the potential to dampen economic growth and market sentiment. Thus, this might also impact the risk appetite for assets like Bitcoin. Furthermore, the strategist suggests that market optimism surrounding central bank rate hikes may not necessarily be valid. This move aims to reduce inflationary pressures, but there is a risk of overcorrection, inadvertently leading to an economic downturn or even a recession. In this scenario, Bitcoin could be particularly prone to value decline as investors seek safer investment options.
However, it’s essential to take note of the inherent uncertainty in any financial asset prediction, and while McGlone presents an unfavorable picture for Bitcoin, it’s also worth acknowledging that cryptocurrency markets can be volatile and unpredictable.
-Featured image from Think Magazine