Analyst Issues Stern Crypto Warning, Says Bitcoin 'May Have Turned Too Hot' Within A Downtrend

Bloomberg’s macro strategist Mike McGlone has said that he thinks Bitcoin BTC/USD is in a poor technical position as it continues to edge downward.

In a Twitter post, McGlone outlined his bearish outlook on the BTC and said its rally above $30,000 this year could be seen as an overextended bounce within a macro bear winter.

“Our graphic shows the downward journey of Bitcoin’s 52-week moving average vs. the upward trend at the onset of the pandemic. The crypto has bounced from too cold in 2022 at around $15,000 and may have turned too hot in April at about $30,000,” McGlone said in the Tweet. 

“Bitcoin may be extended within a downtrend. It’s the enduring patterns of booms on the back of liquidity and busts when it’s removed that tilts our direction bias for Bitcoin toward respecting the down-sloping 52-week mean,” he added. 

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Talking about Fed’s recent move, McGlone said that the Fed's decision to tighten twice following a bank run may show the central bank’s tenacity. Slumping copper and cryptos appear to be heeding the warning, in contrast to the resilient stock market.

Earlier this month, he warned that the worst might not be over for Bitcoin, predicting a liquidity crunch in the second half of 2023 due to an expected U.S. recession.

McGlone said BTC would drop further due to recessionary headwinds. While markets have bounced recently, a broader downward market trend will continue, he added. 

“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 said. 

At the time of writing, Bitcoin was trading at $26,018, down 4.3% in the last seven days. 

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