Here's Why One Analyst Says The Worst For Bitcoin May Not Be Over

Bloomberg’s macro strategist Mike McGlone says that the worst may not be over for Bitcoin BTC/USD, predicting a liquidity crunch in the second half of 2023 due to an expected U.S. recession.

In a report titled "Still, Don't Fight the Fed" that was shared on LinkedIn, McGlone wrote that BTC will drop further due to recessionary headwinds.

“June may show more of the 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,” he wrote. 

According to McGlone, while markets have bounced recently, 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,” he wrote. 

“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). As a result, it may take a decline in equities for rates to fall.” McGlone added. 

Also Read: Here's Why This Analyst Says A $10T Market Cap For Bitcoin Can Happen

Last month, McGlone said that he sees the stock market falling off a cliff, following which most altcoins will likely witness a severe correction, with Bitcoin printing a new bear market bottom.

“My base case is going to 3,000, Bitcoin is going to go down, I don’t know how far. It might make a new low. Cryptos will go down really hard. We’re going to purge some of these 24,000 cryptos. Get rid of some. They’re just silly,” he said. 

Previously, McGlone warned that Bitcoin could dip to as low as $7,000, saying an expected U.S. recession will likely 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,” McGlone added. 

At the time of writing, Bitcoin was trading at $27143, up by two percent in the last seven days. 

Now Read: Analyst Who Predicted May 2021 Crypto Crash Now Says Bitcoin Set To Surge To This Price By 2024

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