Mike McGlone, Bloomberg Intelligence’s senior macro strategist, warns that Bitcoin’s (BTC) latest rally above $31,000 is facing a powerful headwind.
McGlone tells his 58,500 Twitter followers that he believes recessionary pressures are coming that could cause Bitcoin to retest the $20,000 level.
“Bitcoin $20,000 or $40,000? Facing the Fed, Recession, Nasdaq – Possible launch of US ETFs (exchange-traded funds) will not protect Bitcoin from its first US recession, a potential bear market and vigilant central banks. Lessons from risky assets vs. negative liquidity and economic contraction.”
McGlone believes liquidity continues to drain from markets as many central banks outside the US raise interest rates this month.
“Bitcoin’s main pivot has been around $30,000 since 2021, when most risky assets were valued by the largest money supply surge in history. That the liquidity back pull is still underway, with most central banks continuing to tighten in June, could be a headwind, even as risky assets have bounced on hopes of a mild US recession and Fed easing.
He also warns that rising stocks may have peaked in the near term with no signs of increasing market liquidity.
“Our chart shows that Bitcoin is lagging recent Nasdaq 100 Stock Index gains, which may have peaked. One-year (FF13) federal fund futures show little potential for additional liquidity fuel.
The Bloomberg analyst also says BlackRock’s mock Bitcoin ETF application, the news of which coincided with Bitcoin’s latest rally, is unlikely to receive approval in 2023.
He warns that there are economic signs that a recession is coming within months.
“Physical Bitcoin ETFs in the US are a matter of time in our view. BlackRock’s application to launch such a fund appears to have accelerated this process, but a launch may not come until 2023, and Bloomberg Economics expects the US to be trending toward recession in the coming months.”
However, another top crypto analyst is more optimistic.
Pseudonymous analyst Pentoshi tells are 693,200 Twitter followers that Bitcoin is likely to soon hit new 2023 highs at the USD 32,453 level.
“Yearly high next imo (in my opinion).”
The crypto trader say key support levels for Bitcoin held last week, including a higher low at the $25,000 level, paving the way for a major increase.
“BTC to $32,500 on HTFs (high time frame).
HL (Higher Low) must have level $25,000
Recovered then retested $26,700.
Bitcoin is trading at $30,891 at the time of writing, up 2.4% in the last 24 hours.
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