Economic Reset Alert: Bloomberg Analyst Predicts Bitcoin Crash Below $10,000
August 25 2023 - 1:58PM
NEWSBTC
Bitcoin (BTC), the world’s largest cryptocurrency, has experienced
a period of stability around the $26,000 mark following the recent
speech by Federal Reserve Chair Jerome Powell. Powell
reiterated the central bank’s commitment to maintaining a 2%
inflation target in his speech. As economists discuss the
implications of this goal, market observers, including Bloomberg’s
Senior Macro Strategist Mike McGlone, have weighed in on the
potential impact of an impending recession on BTC’s price. Bitcoin
Faces Bearish Outlook? During his speech, Chair Powell stressed the
importance of implementing a “sufficiently restrictive” policy to
address inflation-related concerns. While economists continue to
debate the merits of this approach, Powell’s emphasis on
controlling inflation has sparked speculation within the financial
landscape. Related Reading: Shiba Inu Whale Buys 708 Billion SHIB,
Sparks Speculation Of Price Recovery Mike McGlone, a respected
senior macro strategist at Bloomberg, remains bullish on Bitcoin,
often called “digital gold.” However, McGlone predicts a potential
decline in Bitcoin’s price, stating that a “normal reversion”
during an economic recession could see Bitcoin trading at around
$10,000, or even as low as $7,500. McGlone acknowledges
Bitcoin’s volatility but highlights its historical performance as
an asset class, even in the face of a significant drop.
Furthermore, McGlone points out that Bitcoin’s 100-week moving
average (MA) is currently trending downward, indicating a negative
market trend. The recent decline from its 2022 and 2023 bottom
further supports this observation. Additionally, Powell’s
mention of ongoing Federal Reserve interest rate hikes adds to the
concerns surrounding Bitcoin’s macro outlook. Nevertheless,
comparing Bitcoin to the stock market in 1921 and 1929, he views
the cryptocurrency as a revolutionary technology with the potential
for long-term growth. In addition to concerns surrounding Bitcoin’s
short-term growth, the U.S. Dollar Index (DXY) has been trending
upward, thereby losing its previous correlation with BTC, which
raises concerns for the leading cryptocurrency in the market. As
reported by NewsBTC, the DXY is approaching significant resistance
levels in the near term. However, it is worth noting that favorable
conditions, increased trading volume, and renewed liquidity
entering the emerging cryptocurrency industry could potentially
provide an opportunity for BTC to recover and reach higher price
levels. Currently, the DXY is trading at 104.169 points and is
approaching two crucial resistance lines. The first resistance lies
at the 104.716 mark, and the second is at the 106 level. These
levels have not been surpassed since May and March, respectively.
Related Reading: PEPE Token Tumbles 20% Amid Suspicious Activity –
Details Nevertheless, if the DXY surpasses these resistance levels,
it could propel the index to even higher levels, possibly reaching
112 points. Such a scenario could pressure BTC and disrupt its
ongoing bullish trend, especially if favorable conditions and a
positive correlation between the two assets are absent. Bitcoin is
being traded at $25,900, showing a minor decrease of 0.7% within
the last 24 hours. However, Bitcoin bulls must reclaim the $26,000
threshold to prevent potential downward movement and further
declines as the market approaches the conclusion of a new monthly
closing period. Featured image from iStock, chart from
TradingView.com
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