Bitcoin: Can BTC reverse? Bloomberg Analyst says BTC just traded at biggest discount ever
Bloomberg Intelligence senior commodity strategist Mike McGlone said the recent crypto market slump has reached extremes.
McGlone says that Bitcoin (BTC) has recently traded at its biggest price drop since the calculation of the top crypto asset's 200-week moving average began.
“Bitcoin’s biggest price drop on September 20 since calculating its 200-week moving average shows just how harsh a crypto crash and risk versus reward for shorting can be compared to the possibility of a continuation of an already extended upward trajectory”.
According to Bloomberg Intelligence strategists, aggressive interest rate hikes by the US Federal Reserve are a “good reason” for Bitcoin to reverse its downward spiral.
“Our chart [below] shows good reason to support one of the best performing assets in history: aggressive rate hikes from the Fed, but that's the endgame. At around 4.3%, the one-year offered fund futures (FF13) has never fallen faster than its 200-week moving average.”
Nurtured futures funds are a derivative based on short-term interest rates regulated by the Federal Reserve. Investors use derivatives to bet on or hedge against short-term interest rate movements.
Regarding the correlation of the crypto market with stocks, McGlone said that Bitcoin and other crypto assets can determine the bottom of the stock market.
“Bitcoin is gaining status as a major 24/7 global risk asset and a leading indicator that never stops trading. It's been a risk-averse year, and cryptocurrencies could be a sign of just how low the stock market can drop. The rapid decline in equities was the main driver in reversing interest rate hike expectations.”
Sep 23, 2022