Bitcoin May Suffer as Recessionary Headwinds Loom
• Bloomberg analyst Mike McGlone predicts that the worst may not be over for Bitcoin, due to recessionary headwinds.
• He believes a liquidity crunch in the second half of 2023 due to a US recession will push BTC lower.
• McGlone sees a downward market trend continuing, warning that risk assets like Bitcoin could dip to as low as $7,000.
Bitcoin (BTC) May Suffer From Recessionary Headwinds
Bloomberg Intelligence’s senior macro strategist Mike McGlone is predicting that Bitcoin (BTC) will drop lower due to recessionary headwinds. In a new Crypto Outlook edition, McGlone says that the worst may not be over for Bitcoin, predicting a liquidity crunch in the second half of 2023 due to a US recession.
Rising Risk Assets and Nasdaq 100 Stock Index
McGlone says that while markets have bounced recently, he does not believe their strength is sustainable. He predicts a broader downward market trend will continue and that the potential for rising risk assets and Nasdaq 100 Stock Index lifting all boats is ephemeral. The graphic of 100-week moving averages shows downtrends for both stock index and Bitcoin according to him.
US Recession Could Push BTC Lower
McGlone warns that an expected US recession is likely to push risk assets such as Bitcoin much lower than its current high of about $30,000 in 2023 compared with its 100-week mean around $33,000. According to him it may take decline in equities for rates to fall because liquidity pumps have started reversing and are still dumping into markets which can ultimately affect prices of major cryptocurrencies like Bitcoin (BTC).
Risk Indicator Feeling Gravity From Comfort Zone
McGlone explains that an unprecedented 2020-21 liquidity boost has pushed prices up but it is now feeling gravity from its comfort zone around $7,000 before this boost began. He believes this pressure on risk assets can only subside once US recession begins or when equity markets start declining significantly which can drag down rates further eventually pushing cryptocurrency prices downwards too.
Bitcoin Trading Price at Time of Writing
At time of writing, Bitcoin is trading at $27,074 – up 0.7% during past 24 hours – giving investors slight hope but according to McGlone this situation may not last long if predicted downturn comes true soon enough.