Bloomberg Intelligence senior macro strategist Mike McGlone is setting a new potential price floor for the Bitcoin (BTC) bear market.
In a new interview with crypto analyst CryptoBirb, McGlone says Bitcoin’s heavy breakdown from previous support levels was a strong sign that BTC was headed significantly lower.
He says Bitcoin could drop down nearly 40% from today’s price. At time of writing, BTC is changing hands at $16,373.
“Initially, when the market broke down that was my indication it’s going to continue to break down because volatility is almost always a great indicator, particularly when you reach an all-time low. When markets breakout from a consolidating range with a good reason, it means it’s going down a lot lower. So that’s why I put out initially that Bitcoin might not reach a plateau until the $10,000-$12,000 area.”
The commodity strategist says crypto markets will likely rebound and that any short term sell pressure, which he says was caused by the Federal Reserve’s rate hikes, isn’t a signal of long-term weakness.
According to McGlone, on a five year time horizon, institutional investors face more risk not allocating to crypto than they do avoiding it.
“Everything is going down this year. This has been the worst year ever for stocks and bonds combined. I mean ever, if you go back 80 years…
So to me, the risk is going forward that I think for most major institutions on a five-year basis at least, the risk is not being somewhat allocated to this space. And I don’t mean the 20,000 highly-speculative cryptos that you can find on CoinMarketCap. I mean the top 10, the top 100, an index that tracks those. So definitely Bitcoin, Ethereum. Yes, they could drop down, but to me an index that tracks those is just going to continue doing what it’s doing and these types of things often carve that foundation.
The key thing to remember right now is the Fed is still pounding hard, all risk assets are going down. Cryptos were the fastest one on the way up and the fastest one on the way down.”
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