Many analysts have weighed on the potential trajectory of the flagship cryptocurrency, Bitcoin. This time, Bloomberg analyst Mike McGlone has highlighted the possibility of Bitcoin price declining further and when this could happen.
Bitcoin Price Could Decline Further
In a tweet on his X (formerly Twitter) platform, McGlone noted that Bitcoin risks declining to $10,000 (which could happen by year-end) as it continues to battle the $30,000 resistance level.ย
This resistance level has long been touted as the key to a sustained breakout in Bitcoinโs price. However, going by the analysis that McGlone shared, the odds seem to be against this happening.ย
Bitcoin has risen significantly in 2023, considering that the crypto asset traded at around $16,000 at the beginning of the year. But, McGlone warned that this may be a โshort-covering rally.โ
As part of this analysis, he noted that liquidity in the Bitcoin ecosystem remained negative heading into the fourth quarter. This ultimately means there is more selling pressure than buying pressure, which could affect Bitcoinโs price.ย
Another factor is the rising interest rates. McGlone noted that Bitcoin gained prominence in a โzero interest-rate worldโ with greater financial freedom. But now, Bitcoin (alongside other cryptocurrencies) might continue to endure a hangover as โglobal rates continue to rise.โย
Global inflation is said to be on the rise, and to curb it, authorities are raising interest rates, which could restrict spending and, by extension, the liquidity that goes into the crypto market.ย
Meanwhile, the analysis noted Bitcoinโs importance in the grand scheme of things. Bloomberg Intelligence drew a correlation between the FED fund futures and Bitcoinโs price. According to projections, Bitcoin needs to decline further before there can be a liquidity reversal in those funds.ย
While the Federal Reserve may not care about Bitcoin, he stated that Bitcoinโs โ24/7-traded, leading indicator status could be gaining traction.โ
BTC could fall to $10,000 | Source: X
The Fate Of The Broader Crypto Market
In another tweet, McGlone noted that cryptocurrencies โmight be leaning into recession.โ To drive home this point, he highlighted the relation between the crypto and stock market and stated that the latter could succumb to an โebbing tideโ suppose the stock market were to experience a โtypical drawdownโ due to a recession.ย
Despite the โbroader on-and-of-again fluctuations,โ this projection is said to be reflected in the โdownward trajectoryโ of the Bloomberg Galaxy Crypto Index (BGCI) and Russell 2000 Index (RTY) from their all-time highs in 2022. Both markets have remained tepid and continue to consolidate as they anticipate a โcatalystโ that could spark a price surge.ย
This analysis is similar to that of crypto analyst Nicholas Merten, who, while drawing out the direct relation between both markets, noted that if the stocks of big tech companies like Apple and Microsoft donโt start picking up, there could be a โreally big problemโ for the crypto market.ย
BTC price still holding above $27,000 | Source: BTCUSD on Tradingview.com
Featured image from Investorโs Business Daily, chart from Tradingview.com
