Bloomberg Strategist Suggests Market Turbulence Ahead as Bitcoin Price Stays Stagnant: Insights
Bloomberg Intelligence senior macro strategist Mike McGlone thinks Bitcoin’s (BTC) recent price action indicates economic turbulence is ahead.
Bitcoin's third-quarter performance, with a 15% decline compared to a 2% gain in the Nasdaq 100 Stock Index, is worth noting. This disparity in the benchmark cryptocurrency's performance could potentially signify an impending stock market correction during a recession or a relative underperformance. The prevailing sentiment leans towards the former, particularly when considering the significant role played by historically low-interest rates in driving risk assets to their current levels since the financial crisis.
Can Bitcoin Predict Nikkei or Vice Versa?
Bitcoin has historically shown a strong correlation with Japan's Nikkei 225 index. The recent weakness in the cryptocurrency market could potentially indicate a broader trend. Alternatively, Bitcoin might regain strength and follow a similar trajectory as the Nikkei, which reached a 33-year peak in June.
We tend to pay attention to Bitcoin as a leading indicator and acknowledge the significance of the downward-sloping 100-week moving average.
McGlone suggests that a Bitcoin recovery to the $31,000 price level could signal a bullish reversal. However, he maintains a bearish outlook for BTC, citing ongoing tightening measures by the Federal Reserve and other central banks.
As of the current update, Bitcoin is trading at $25,746, reflecting a marginal 0.1% decline in the past 24 hours.
Sep 07, 2023