Bloomberg Intelligence senior macro strategist Mike McGlone says that Ethereum (ETH) is showing strong support, while Bitcoin (BTC) will likely fall lower.
In a new interview with Deep Dive host Cassandra Leah, McGlone says Bitcoin could drop 38% from its current trading price, comparing the risk asset to Internet stocks during the dot.com bust.
At time of writing, Bitcoin is changing hands at $16,266.
But McGlone says after Bitcoin’s further collapse as a result of the FTX implosion and contagion through the markets, it will likely rise again.
“Bitcoin broke down hard for a good reason. I think it has further downside… First of all let’s start off optimistically. In the big picture, I still see the base case for Bitcoin as a nascent asset/technology. It’s going to advance over time. But in the meantime, we’re in that pain stage that’s compared to the Internet stocks around 2000, 2002.
It might reach a very good floor around $10,000 to $12,000 there. That’s very solid support. And then eventually at some point, it is going to come out ahead and resume that upward trajectory.”
Shifting focus to Ethereum, McGlone says the smart contract platform is likely going to hold up above $1,000. At time of writing, ETH is changing hands at $1,176.
“One thing I’ve been watching, keeping a close eye on, is Ethereum. Ethereum around $1,200 as we speak on Thursday the 17th is still up about 12x from the end of 2019, which is right before COVID hit. So let’s look at that level around $1,000 as a pretty good solid support.”
McGlone says the impacts of the FTX implosion will likely continue to drive down the market with sell-offs.
“This is a contagion and every single risk manager and fiduciary on the planet now is double checking all their risk managements, all their assets and everybody they have connections with and this is just part of that trickle down and it’s also causing people hit stops in most assets.”
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