Bloomberg Analyst Says Bitcoin Bottoming Out Like 2018 Amid ‘Unprecedented’ Macro Climate

Bloomberg Intelligence senior macro strategist Mike McGlone says Bitcoin (BTC) is forming a bottom similar to 2018 but under very different macroeconomic conditions.

In a new interview with Scott Melker, McGlone compares Bitcoin’s recent rally into the $20,000 range to BTC’s bottom formation in 2018 at the $5,000 price level.

“We’re still pulling liquidity from the market on a global basis – an historical, unprecedented basis – for good reasons. And if equities go higher, if risk assets go higher, this liquidity is more likely to remain constrained from central banks.

So what I’m showing you is a chart, we see this potential island bottom developing around $20,000, the same way it did around $5,000 back in 2018. The big difference is what I show you in white is the federal fund futures. Back then the Fed already started easing and we held the bottom and broke out higher and then we had that issue in 2019.”

McGlone warns the king crypto asset may not continue to surge amid the challenging macro conditions and the Federal Reserve’s interest-rate hiking policy, which puts downward pressure on risk assets.

He says one indication that Bitcoin’s rally is not going to continue is that the NASDAQ is likely to dip below its 200-week moving average. The NASDAQ has held a close correlation with the performance of Bitcoin in the past year.

“This is the NASDAQ. The NASDAQ is at its 200-week moving average. The 200-week moving average in the history of the NASDAQ since it can be calculated we only broke through that level three times. And every single time the Fed was easing. The last good example was 2008. Fed was easing aggressively.

Right now they’re tightening aggressively. So you look at that you can’t be too excited about any markets. Give it some time. Big picture, yes, really bullish [for] Bitcoin. But to me this is an environment that’s unprecedented where we’re having bounces in what we know are bear markets and the Fed just says, Sorry we’re taking the punchbowl away, we’re not giving it get back to you.”